Oil Prices Rise Amid Supply Disruption Concerns
Investor Concerns Drive Oil Prices Up
Oil prices saw a rise on Wednesday, driven by investor worries about potential supply disruptions due to a worsening geopolitical landscape. Despite a surprise increase in U.S. crude oil inventories, concerns remained high.
Market Response to Oil Price Movement
Oil futures experienced a 0.8% increase to $89.64 per barrel for Brent, while U.S. West Texas Intermediate futures rose by 0.7% to $85.75 per barrel. Both contracts hit new five-month highs, marking the third consecutive session of gains.
Market Adjustment After Inventory Report
Following the U.S. Energy Information Administration’s report of a 3.2 million barrel increase in crude stocks, prices pulled back slightly. This unexpected rise in inventories contrasted with analyst expectations and temporarily halted the upward momentum.
Factors Influencing Oil Price Movement
Technical indicators signaling overbought conditions for both Brent and WTI futures added pressure on prices. Despite this, ongoing concerns about supply disruptions from geopolitical tensions in Ukraine and the Middle East continued to support the market.
Global Impact on Oil Markets
Recent developments involving Iran’s retaliation threats against Israel and the ongoing conflict in Gaza have added to market uncertainties. Alongside strong economic data from the U.S. and China, these geopolitical factors are shaping oil price dynamics.
Outlook and Forecasts
Bank of America Global Research has revised its 2024 Brent and WTI price forecasts to $86 and $81 per barrel, respectively. Meanwhile, the recent OPEC+ meeting maintained existing output policies and urged member countries to ensure compliance with production cuts.
