Oil prices increased on Thursday due to concerns about lower supply and signs of stronger economic growth in the U.S., the world’s largest oil consumer. Brent futures for June rose by 15 cents, settling at $89.51 a barrel at 0037 GMT. U.S. West Texas Intermediate (WTI) futures for May also rose by 15 cents to $85.59 a barrel, closing on Wednesday at their highest levels since the end of October.
Recent events, such as Ukraine’s attacks on Russian refineries disrupting fuel supply and concerns about the Israel-Hamas conflict possibly spreading to include Iran and disrupting supplies in the Middle East, have contributed to the rise in oil prices. Additionally, Iran’s vow to seek revenge against Israel for an attack that killed high-ranking Iranian military personnel on Monday has impacted oil prices as Iran plays a significant role in the oil market as the third-largest producer in OPEC.
A meeting held by top ministers from the Organization of Petroleum Exporting Countries (OPEC) and its allies chose to keep current oil supply policy unchanged on Wednesday, with some countries encouraged to increase compliance with output cuts while Russia announced a shift towards output cuts rather than export curbs.
Federal Reserve Chair Jerome Powell’s cautious approach to future interest rate cuts, based on recent data showing higher-than-expected job growth and inflation, was seen as positive for oil prices as it indicated strong economic growth in the U.S., according to Rob Haworth, senior investment strategist for U.S. Bank’s asset management group. The comments made by Powell supported this notion of strong economic growth and were beneficial for oil prices.
In conclusion, a combination of factors such as concerns about lower supply, signs of stronger economic growth in the U.S., recent events disrupting fuel supply and geopolitical tensions have contributed to an increase in oil prices on early Asian trade on Thursday.
