U.S. Growth Pushes Oil Prices Higher Amid Supply Concerns

4 Apr 2024 , 10:56 AM

Early Asian trading on Thursday saw an increase in oil prices due to worries about a reduced supply as major suppliers continue to reduce output and indications of stronger economic development in the United States, which is the world’s largest oil consumer.

June Brent futures increased by 15 cents, or 0.2%, to close at $89.51 per barrel. The May contract for U.S. West Texas Intermediate (WTI) increased by 15 cents, or 0.2%, to $85.59 a barrel.

After rising for the previous four days, the June Brent contract and the May WTI contract finished on Wednesday at their highest levels since late October.

Oil has increased due to the attacks by Ukraine on Russian facilities, which has reduced gasoline supplies, and worries that the Israel-Hamas conflict in Gaza may extend to Iran, potentially interrupting supplies in the vital Middle East region.

Top ministers from the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, met on Wednesday and urged some nations to increase adherence to output reductions while maintaining the status quo on oil supplies.

The group promised that some participants would make up for the first quarter’s excess inventory. It further stated that instead of export restrictions, Russia would go to output.

Jerome Powell, the chair of the Federal Reserve, expressed caution on Wednesday on potential interest rate reductions in the future due to recent statistics that revealed higher-than-expected inflation and job growth.

Iran has promised retaliation against Israel in the Middle East for an attack on Monday that resulted in the deaths of senior Iranian military officers. Iran ranks third among OPEC’s producers.

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