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19/06/24
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Crude Prices Hit 7-Week High on War Jitters, Demand Hopes
On Wednesday, crude prices reached 7-week highs as concerns over escalating conflicts and summer demand optimism offset a report that said U.S. crude inventories rose unexpectedly.
Brent crude futures rose 23 cents, or 0.3%, at $85.56 per barrel, and U.S. West Texas Intermediate crude was 18 cents, or 0.2% higher, at $81.75 per barrel.
Oil broker PVM’s Tamas Varga said although the current picture was underwhelming, there were green shoots that showed a more optimistic outlook.
Varga added the Brent price being $8 higher than the lows reached in early June showed genuine optimism that the oil balance globally would tighten eventually.
Both benchmarks recovered strongly in the past two weeks and rose over $1 in the previous session to 7-week highs after a Ukrainian drone strike at a major Russian port led to an oil terminal fire.
Although the U.S. is attempting to avoid a broader conflict between Israel and Hamas, Israel’s Foreign Minister Israel Katz warned of a possible full-scale war with Lebanon’s Hezbollah.
War risks escalate supply disruption in the crucial oil-producing region.
A market strategist at IG, Yeap Jun Rong, said a cooling off between the parties appeared difficult in the short term, which may keep supporting oil prices.
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