Hana "WTI Expected to Trade in a $60-$75 per Barrel Range with a Sideways Market"

Hana Securities forecasted that international oil prices will face downward pressure due to an oversupply of crude oil this year, expecting a moderate adjustment range of $60 to $75 per barrel based on West Texas Intermediate (WTI) crude oil.

On the 7th, Jeon Gyu-yeon, a researcher at Hana Securities Research Center, stated in the report titled "Commodity Recipe - Trump's Strong Influence and the Direction of International Oil Prices," "International oil prices are expected to face predominant downward pressure due to an oversupply of crude oil."

Jeon pointed out concerns about "oversupply," noting that after the inauguration of Donald Trump's second U.S. administration, U.S. crude oil production and inventories have increased, and the major oil-producing countries' coalition, OPEC+, is set to begin increasing production as planned from April.

He explained, "Shale companies began increasing crude oil production around the time of Trump's election and are maintaining record-high production levels," adding, "The number of oil rigs, which had been gradually decreasing for two years since early 2023, started to rebound after mid-January this year."

Meanwhile, U.S. commercial crude oil inventories have also increased since mid-January, creating a situation where more countries need to import U.S. crude oil and petroleum products. Jeon predicted, "South Korea, along with the Netherlands and Canada, is one of the largest importers of U.S. crude oil, and since it needs to reduce its trade surplus with the U.S., energy imports from the U.S. are likely to increase."

In particular, global crude oil supply is expected to increase not only in the U.S. but also in oil-producing countries led by Saudi Arabia and Russia. Jeon said, "OPEC+ has decided to ease voluntary production cuts of 2.2 million barrels per day starting in April and begin increasing production," adding, "If the Ukraine war ends, sanctions on Russian crude oil exports could be lifted, leading to additional crude oil supply." Although the Trump administration's announced tightening of sanctions on Iran may reduce Iranian supply in the future, it is expected that OPEC+'s supply will offset this.

Jeon stated, "As (U.S.-originated) trade disputes spread globally, concerns about economic slowdown are growing, limiting expectations for crude oil demand," and forecasted, "WTI will experience a moderate adjustment within a box range of $60 to $75 per barrel."

Meanwhile, WTI (April delivery) continued its recent downward trend but closed at $66.36 per barrel on the 5th (local time) at the New York Mercantile Exchange, up $0.05 (0.08%) from the previous session. Although this marks a rebound after five trading days, analysts suggest it is still difficult to interpret this as a return of investor sentiment since prices remain below the $70 per barrel level.