Oil Prices Rise in Asian Trade
Oil Prices Hit Five-Month Highs
Oil prices in Asian trade saw a slight increase on Wednesday, maintaining five-month highs. This rise comes as U.S. inventories show signs of shrinking, and potential supply disruptions in Russia create a tighter outlook for global crude markets.
OPEC+ Meeting in Focus
The focus has now shifted to a meeting of the Organization of Petroleum Exporting Countries and allies (OPEC+). The producer group is expected to keep production unchanged, with the meeting scheduled for later in the day.
Middle East Conflict and Supply Disruptions
Fears of a broader conflict in the Middle East have emerged after Iran promised retaliation against Israel for strikes on the Iranian embassy compound in Damascus. This situation presents the possibility of more supply disruptions in the region, contributing to the surge in oil prices to levels last seen in late October.
Oil Prices on the Rise
Oil prices for June delivery rose by 0.2% to $89.13 a barrel, while prices for Brent crude rose by 0.2% to $84.42 a barrel by 20:19 ET (00:19 GMT).
Factors Affecting Oil Prices
Expectations of tighter supplies have pushed oil prices higher despite a stronger dollar and uncertainty surrounding U.S. interest rates. However, these factors have also limited broader gains in the crude market.
US Oil Inventories Decline
Data from the American Petroleum Institute (API) revealed a nearly 2.3 million barrel decline in inventories for the week ending March 28, surpassing expectations. This marks the third weekly draw in inventories over the past four weeks, indicating a tightening U.S. oil market.
OPEC to Maintain Production
OPEC+ is anticipated to keep production unchanged during their upcoming meeting. The cartel has committed to maintaining current production cuts until at least the end of June, signaling market stability through late 2023 and early 2024.
Russia Refinery Disruptions and Middle East Tensions
Recent attacks on Russia’s energy infrastructure, including the third-largest oil refinery, have raised concerns about potential disruptions in oil exports from Moscow. Additionally, escalating tensions in the Middle East, particularly between Iran and Israel, are contributing to market volatility.
