April 02, 2024 (MLN): Global oil prices rose for the fourth straight session amid strengthened demand hopes in China and the U.S. coupled with growing concerns about a widening conflict in the Middle East that could affect supply from the region.
Brent crude traded near $87.56 per barrel, up by 0.21% on the day.
While West Texas Intermediate crude (WTI) was at $83.59 per barrel, up by 0.20% on the day.
Quarterly, Brent rose by 12.9% in the first quarter of 2024, while WTI also surged by 15.8%.
"The bullish catalysts for oil prices continue to pile up, with stronger-than-expected economic conditions in China and the U.S. offering a more optimistic demand outlook, while geopolitical tensions in the Middle East continue to heat up with the involvement of Iran," said IG market strategist Yeap Jun Rong in an email, Reuters reported.
Manufacturing activity in March in China expanded for the first time in six months and in the U.S. for the first time in 1-1/2 years, which should translate to rising oil demand this year. China is the world's largest crude importer and second-largest consumer while the U.S. is the biggest consumer.
In the Middle East, an Israeli strike on Iran's embassy in Syria killed seven military advisors, among them three senior commanders, marking an escalation in the war in Gaza between Israel and Hamas, which is supported by Iran.
A widening of the conflict that has stretched for nearly half a year to include Israel directly fighting Iran has sparked concerns about impacts on oil supply.
"To date, the market hasn't been worried about supply disruptions, with the war remaining contained. Iran’s involvement could see its oil supply under threat," ANZ analysts wrote in a note.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, will hold an online meeting of its Joint Ministerial Monitoring Committee on Wednesday to review the market and members' implementation of output cuts.
Members are expected to uphold their current supply policy calling for voluntary output cuts of 2.2 million barrels per day (bpd) to the end of the second quarter.
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Posted on: 2024-04-02T10:45:12+05:00
