Oil Prices Inch Upward: Supply Concerns Outweigh Demand Worries

27 Jun 2023 , 10:14 AM

On Tuesday, oil prices higher amid political instability in Russia and fear of supply disruption counter-balanced concerns about global demand on a second consecutive day.

As the escalations prevented and Russian mercenary group Wagner retreats from Rostov, easing tensions, but it also raise the concern of President Vladimir Putin’s grip on power and some concern about possible disruption of Russian oil supply.

Investors have already been concerned about reduced supply as a result of Saudi Arabia’s commitment to decrease output starting in July. Last week, oil prices dropped by approximately 3.6% amid fears that additional interest rate increases by the U.S. Federal Reserve could weaken oil demand, especially considering the underwhelming economic recovery in China that has left investors dissatisfied.

Due to the worries of interest rate hike from US Federal Reserve, oil has fell around 3.6% in the last week. At the same time, China’s economic recovery has also disappointed investors.

Brent crude futures saw a marginal increase of 6 cents, reaching $74.24 per barrel, while U.S. West Texas Intermediate (WTI) futures experienced a slight gain of 10 cents, reaching $69.47 per barrel. The previous day, Brent had risen by 0.5%, and WTI had increased by 0.3%. The rise in oil prices can be attributed to concerns over supply, which offset worries regarding demand.