Oil Prices Surge Over $1 on OPEC+ Commitment and Geopolitical Tensions
In a dramatic turn of events, oil prices surged more than $1 a barrel on Thursday, capping off the month with a significant increase. The rise was fueled by the likelihood of OPEC+ maintaining production cuts, ongoing attacks on Russia’s energy infrastructure, and a decrease in the US rig count, all of which are tightening crude supplies, as reported by Reuters.
Brent Crude Hits Highest Level Since October
Brent crude futures for May settled at $87.48 a barrel, reaching its highest level since October 27. The June contract also saw a significant increase, settling at $87 a barrel. This surge comes as the May contract expired on Thursday.
US WTI Crude Sees a Sharp Rise
US West Texas Intermediate crude futures for May delivery settled at $83.17 a barrel, marking a notable increase of $1.82 or 2.2 percent.
Benchmarks Finish Higher for Third Consecutive Month
Both Brent and WTI benchmarks closed the week with gains of 2.4 percent and 3.2 percent, respectively. This marks the third consecutive month of higher prices for crude oil.
Market Outlook and Future Predictions
Despite a slight increase in US crude oil and gasoline inventories in the previous session, analysts remain optimistic about the future of oil prices. With expectations of a global oil market in a slight deficit and lower-than-expected inventory builds, the outlook for Brent crude remains positive.
Factors Supporting Price Increase
Several factors, including rising refinery utilization rates, a decrease in the oil and gas rig count, and a stronger-than-expected US economy, are contributing to the upward trend in oil prices. Additionally, inflation data and potential interest rate cuts are being closely monitored by investors.
Geopolitical Tensions and Supply Disruptions
Increased geopolitical risks, particularly attacks on Russian energy infrastructure by Ukraine, have heightened concerns about possible supply disruptions. While OPEC+ is not expected to make any immediate changes to oil output policies, the situation remains volatile.
Market Speculation and Future Expectations
Investors are eagerly awaiting cues from the upcoming meeting of the Joint Monitoring Ministerial Committee of OPEC. The uncertainty surrounding geopolitical tensions and supply dynamics is likely to continue influencing oil prices in the coming months.