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25/11/24
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Oil Prices Steady at $70.80 Amid Geopolitical Tensions and Rising Demand
Oil markets are currently monitoring the dynamics of West Texas Intermediate (WTI) prices, which have recently stabilized around $70.80 per barrel amid fluctuating geopolitical tensions. The situation arises predominantly from escalations involving significant oil producers like Russia and Iran, which have raised concerns over possible supply disruptions. Despite a brief rally in oil prices, a cautious outlook is warranted due to these ongoing geopolitical issues.
Last week saw a slight uptick in oil prices as tensions escalated due to Ukraine’s military actions against Russia using Western weapons. This prompted Russia to react by deploying a newly developed hypersonic ballistic missile, signaling a potential shift in the conflict that raises alarms regarding the stability of oil supplies in the future. Analysts note that these developments indicate a riskier environment, highlighting the fragility of the situation and its possible implications for global oil markets.
In parallel, Iran has taken actions in response to pressure from the international community, specifically from a recent resolution endorsed by the UN atomic watchdog. Iran’s activation of advanced centrifuges for uranium enrichment marks a significant move in its nuclear strategy, which could have further repercussions for international relations and energy markets. This resolution has been designed to enhance scrutiny over Iran’s nuclear activities and to foster renewed discussions regarding its nuclear program.
Additionally, demand for oil is witnessing an upward trend, particularly from major importers like China and India. China has experienced a rebound in crude oil imports, attributed to lower prices prompting stockpiling strategies. Concurrently, India has seen its refiners increase crude processing significantly, with October figures showing a 3% year-on-year rise in throughput, reaching 5.04 million barrels per day. This resurgence in demand may provide further support to oil prices amidst the current geopolitical uncertainties.
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