Oil prices were relatively steady on Tuesday after a period of volatility linked to shifting risk sentiment and macroeconomic cues, with Brent and West Texas Intermediate benchmarks trading in a defined range as demand and supply narratives balanced out.

Traders cited improved global risk appetite following strong corporate earnings and stabilising monetary policy expectations, though supply concerns still influenced pricing dynamics. Inventories and OPEC+ guidance in the near term were also factored into price expectations.

Energy equities mirrored the broader caution, with sector indexes posting modest gains in line with broader market sentiment.

Investors said that oil market direction will hinge on incoming economic data and geopolitical developments in key producing regions.

Supply fundamentals remain a key theme in oil market discussions, with OPEC+ members emphasising production discipline and the potential for coordinated policy responses if markets become volatile.

Non-OPEC production — particularly in North America — continues to feature in supply forecasts and affects benchmark pricing dynamics. Traders are also monitoring refinery utilisation and transport logistics for further insights into near-term demand conditions.

Demand signals have been mixed, with strong growth cues in certain regions offset by weaker consumption readings elsewhere.

Asia’s economic activity indicators, including manufacturing and service sector data, have influenced demand expectations. Forecast revisions from major agencies underscore the challenge of reconciling divergent regional trajectories.

Investors said that overall energy demand forecasts remain cautiously optimistic.

Currency movements and interest rate expectations are also influencing oil valuation, as a firmer U.S. dollar can dampen dollar-priced commodity demand from international buyers.

Forex markets responded to macro cues that shape capital flows into commodities and risk assets more broadly. Fixed-income markets showed stable yield behaviour, indicating balanced growth and inflation expectations.

Looking ahead, upcoming economic data such as U.S. industrial production and Chinese demand indicators will be key drivers of sentiment in oil markets.

Additionally, geopolitical developments that affect shipping lanes and production infrastructure could inject fresh volatility into energy prices.

Source: Reuters