Oil Up on Demand, Mideast Worries

18 Jun 2024 , 08:53 AM

Oil prices rose in early trade on Tuesday, extending gains from the previous session on improved demand expectations and market confidence that OPEC+ producers may delay or reverse plans to increase supplies beginning in the fourth quarter of this year.

Brent crude futures rose 21 cents, or 0.25%, to $84.46 a barrel. U.S. West Texas Intermediate crude futures rose 16 cents, or 0.2%, to $80.49 per barrel.

Both benchmarks rose by almost 2% on Monday, finishing at their highest since April.

Last week, the Organisation of Petroleum Exporting Countries (OPEC), the International Energy Agency, and the United States Energy Information Administration expressed confidence that oil consumption will increase in the second half of the year, putting pressure on stockpiles.

Investor morale has improved since OPEC+ startled the market by announcing intentions to increase output beginning in October, with the belief that higher future demand will sustain prices.

Hedge funds and other money managers purchased the equivalent of 80 million barrels in the six most prominent petroleum futures and options contracts for the seven days ending June 11. Purchases reversed over 40% of the 194 million barrels sold the week after the OPEC+ announcement.

Tensions in the Middle East also kept a floor under the market, with the risk of a disruption to global oil supply from the key producing region if the Israel-Hamas battle in Gaza spreads.

A U.S. special envoy on Monday visited Jerusalem, hoping to calm the situation on the disputed border with Lebanon, where Israel claimed tensions with the Iran-backed Hezbollah militia were bringing the region close to a wider battle.

Meanwhile, the U.S. military said it had destroyed four Houthi radars, one uncrewed surface vessel and one drone in the preceding 24 hours. Iran-aligned Houthi rebels in Yemen have begun assaulting vessels travelling the Red Sea in display of solidarity with the Palestinians in the Gaza battle.

For feedback and suggestions, write to us at [e-mail]

For opening a demat account click on: https://www.indiainfoline.com/

For doing stock trading & investments, go to: https://ttweb.indiainfoline.com/trade/Login.aspx

For loans, go to: https://www.iifl.com/