Middle East Tensions Flare, Pushing Oil Prices Upwards

30 Jan 2024 , 09:09 AM

Early on Tuesday, oil prices increased as worries about supply were exacerbated by the Middle East’s growing geopolitical unrest.

Brent crude futures had increased by 25 cents, or 0.3%, to $82.65 per barrel. At $77.09 per barrel, U.S. West Texas Intermediate crude was up 31 cents, or 0.4%.

After a Hong Kong court ordered the liquidation of real estate behemoth China Evergrande Group, both contracts plummeted below $1 on Monday as concerns about Chinese demand were stoked by an escalating real estate crisis.

Analysts note that despite Washington’s pledge to take ‘all necessary actions’ to safeguard its troops after a deadly drone assault in Jordan by militants backed by Iran—the first American military casualties since the start of the Israel-Gaza conflict—the market is still tense due to growing concerns over the oil supply.

The Federal Open Market Committee (FOMC) begins a two-day meeting on Tuesday, and the advances in oil prices coincide with the Federal Reserve’s decision to raise interest rates.

Although it is anticipated that policymakers would maintain current interest rates, some investors think the US Federal Reserve may abandon its hike-biased strategy.

According to a Reuters poll, petrol stocks were predicted to rise last week while crude oil and distillate inventories in the US were predicted to decline.

The U.S. stockpiles data will be released by the industry group American Petroleum Institute on Tuesday at 4:30 pm EST, while the U.S. Department of Energy’s statistical arm, the Energy Information Administration, is expected to release its data on Wednesday at 10:30 a.m. EST.

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