Oil Prices Climb Amid Middle East Tensions and Demand Concerns
Geopolitical Tensions Drive Oil Prices Up
Oil prices saw an uptick in Tuesday’s trade due to ongoing geopolitical tensions in the Middle East, sparking concerns among investors. However, this increase was tempered by apprehensions regarding demand and awaited monthly reports from oil agencies.
Price Movement and Market Sentiment
Oil futures for May delivery showed a 0.4% increase, reaching $82.58 a barrel, while the April contract rose by 0.3% to $78.20 a barrel. Despite the conflict between Israel and Hamas not causing significant supply disruptions, attacks by Yemen’s Houthis on ships in the Red Sea and Gulf of Aden have been ongoing.
Factors Limiting Price Gains
Concerns around weaker demand and rising supply from non-OPEC producers have put a cap on the price surge. Serena Huang, head of APAC analysis at Vortexa, highlighted the bearish sentiment in the market due to these factors.
Supply and Demand Dynamics
The International Energy Agency (IEA) anticipates a record high oil supply of approximately 103.8 million barrels per day, primarily driven by non-OPEC producers like the United States, Brazil, and Guyana. China’s crude oil imports also showed a mixed trend, indicating softer purchases by the world’s largest buyer.
Upcoming Reports and Market Expectations
Analysts from ANZ noted that the market is eagerly awaiting demand estimates from monthly reports by OPEC, the IEA, and the Energy Information Administration. Any positive surprises in these estimates could alleviate concerns about demand.
