Oil prices continued their upward trajectory amid investors’ concerns over possible disruptions in supply due to rising geopolitical tensions, on Wednesday. However, some of these concerns were eased by an unexpected increase in US crude inventories.
Brent crude futures climbed 84 cents, representing a 0.9% increase, to $89.76 a barrel by 11:38 am ET (1538 GMT). Similarly, US West Texas Intermediate futures experienced a gain of 76 cents, or 0.9%, reaching $85.91 per barrel.
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During the session, both contracts experienced an increase of more than a dollar each before the US Energy Information Administration revealed a 3.2 million barrel rise in crude stocks. Analysts polled by Reuters had forecast a cut of more than 1.5 million barrels, in line with preliminary data released by the American Petroleum Institute on Tuesday.
What weighs on crude oil prices?
- Brent and WTI futures rose to their highest levels in more than five months, maintaining this momentum for three straight sessions. This rally is motivated by fears over Ukraine’s recent attacks on Russian refineries, along with fears of a possible escalation of conflict in the Middle East, both of which could disrupt oil supplies.
- Iran vowed revenge against Israel after an attack on Monday that resulted in the death of senior military figures. As a significant supporter of the Hamas militia engaged in conflict with Israel in Gaza, Iran holds the position as the third largest producer within the Organization of the Petroleum Exporting Countries (OPEC).
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- In a note published on Wednesday, Bank of America Global Research revised its 2024 Brent and WTI forecasts up to $86 and $81 per barrel, citing strengthening demand and rising political tensions. Meanwhile, during a meeting of the main ministers of OPEC on Wednesday, the oil production policy remained unchanged, with pressure exerted on some countries to strengthen compliance with production cuts.
(With inputs from Reuters)
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Published: 03 Apr 2024, 23:00 IST