2024-04-11 13:09:35
As tensions rise in the Middle East, and Iranian threats of retaliation continue following a suspected Israeli air strike on its consulate in Syria at the beginning of the month, oil prices rose on Thursday. Iran is the third largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC). Some analysts believe that the possibility of the war between Israel and Hamas expanding across the Middle East “might jeopardize oil supplies.”
Published on: 04/11/2024 – 15:09
3 minutes
On Thursday, Brent crude futures rose 27 cents, or 0.3 percent, to $90.75 per barrel, while US West Texas Intermediate crude futures rose 25 cents, or 0.3 percent, to $86.46 per barrel.
“Prices remain sensitive to geopolitical developments in the Middle East, with market participants pricing in the risks of supply disruption if tension persists for a longer period,” said IG’s Yip Jun Rong.
He pointed to US interest rates, saying: “This helps offset the risk-off trends last night, as markets adjust their interest rate expectations to rule out a cut in interest rates in June and keep interest rates high for a longer period until September.”
Daniel Haines, an analyst at ANZ, said: “The market has become increasingly concerned regarding the possibility of the war between Israel and Hamas expanding across the Middle East, putting oil supplies at risk.”
In its monthly report on Thursday, OPEC kept its expectations for growth in global oil demand in 2024 unchanged at 2.25 million b/d, and its expectations for growth in global demand in 2025 unchanged at 1.85 million b/d.
Iranian attacks are expected
Both contracts rose more than one percent in the previous session following three of the sons of Ismail Haniyeh, head of the political bureau of the Palestinian Islamic Resistance Movement (Hamas), were killed in an Israeli air strike on Gaza, raising fears that ceasefire talks between the two sides would falter.
While the Middle East region awaits possible Iranian retaliation following a suspected Israeli air strike on the Iranian embassy in Syria at the beginning of the month.
A report by Bloomberg News Agency on Wednesday stated that the United States and its allies believe that major missile or drone attacks by Iran or its agents once morest Israel are imminent.
The US State Department said on Wednesday that Secretary of State Anthony Blinken informed Israeli Defense Minister Yoav Galant that the United States stands with Israel once morest any threats from Iran.
Earlier this week, Israel and Hamas began a new round of negotiations regarding their more than six-month-old war in Gaza, but those discussions did not result in any agreement.
Curb inflation in the world’s largest economy
The minutes of the Federal Reserve meeting (the US central bank) showed that officials are concerned that the progress achieved with regard to inflation may halt, and that there is a need to extend the tight monetary policy for a longer period to curb inflation in the largest economy in the world.
Investors, who had previously expected a cut in interest rates in June, see September as the most likely time for the start of the monetary easing cycle following the release of stronger-than-expected data on consumer inflation for the third time in a row.
Oil market traders are also awaiting the monthly market report issued by OPEC later Thursday, and the oil market report issued by the International Energy Agency on Friday.
Continuing high interest rates for a longer period may weaken economic growth and suppress demand for oil.
France 24/Reuters
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