Reports indicate that crude oil prices continued to strengthen on Wednesday, with Brent crude hitting a nearly three-month high, and WTI crude again surpassing the $62 mark, reaching a new high for several months. The main drivers of the rising oil prices were the supply disruptions caused by the U.S. winter storm, the risk premium from Middle Eastern geopolitical tensions, and the uplift effect of a weaker dollar on dollar-denominated commodities.
Market Review: Brent at a High, WTI Sets Multi-month Record
Reports show that Brent crude futures peaked at $66.83 per barrel; WTI crude futures rose and broke through $62 per barrel, reaching a new high since October 2025.
Reuters also pointed out that oil prices extended their previous gains on Wednesday, with the market's core trading logic centered around 'short-term supply tightening expectations.'
Triple Drivers: Geopolitics, Weather, and Dollar Resonance
First, the winter storm hit U.S. supplies. Institutions and traders estimate that the storm may temporarily reduce U.S. crude oil daily production by up to about 2 million barrels over the weekend, accounting for approximately 15% of national output, and put pressure on some energy infrastructure and transportation.
Second, Middle East tensions elevate the risk premium. The market remains sensitive to tensions related to Iran, with concerns about escalating conflicts and the safety of key shipping routes possibly pushing up oil price risk pricing in the short term.
Third, a weaker dollar provides 'financial tailwind.' Reuters mentioned in a global market summary that the dollar significantly retreated amid policy rhetoric disturbances, making dollar-priced commodities more accessible to capital and demand support.
Supply and Demand Perspective: Short-term Tightness and Medium-term Divergences Coexist
In the short run, 'production cuts + geopolitical premium + dollar depreciation' make it easier for oil prices to continue rebounding; however, medium-term variables still exist. Reuters pointed out that expectations of future OPEC+ policies, potential global supply surpluses, and the pace of production recovery in some regions will all affect whether oil prices can transition from a rebound to a more stable upward trend.
Institutional Perspective: Post-spot Pricing Window After Off-season Base
According to Investing.com citing Huatai Securities, the geopolitical premium during the off-season prompted oil prices to 'base and rebound,' coupled with improved demand expectations, Huatai has raised its 2026 Brent average price forecast to $65 per barrel (up from $62 per barrel previously).
