Increasing Oil Prices Linked to Supply Shortages and Positive U.S. Economic Indicators

Oil Prices Surge on Conflicts and Economic Growth: Brent Futures Up 15% in Early Asian Trade

On Thursday, oil prices in early Asian trade rose due to concerns about lower supply and stronger economic growth in the U.S., the world’s largest oil consumer. Brent futures for June increased by 15 cents, settling at $89.51 a barrel at 0037 GMT. U.S. West Texas Intermediate (WTI) futures for May also rose by 15 cents to $85.59 a barrel. Both contracts have experienced increases for the past four days, closing on Wednesday at their highest levels since the end of October.

Recent events such as Ukraine’s attacks on Russian refineries disrupting fuel supply and concerns about the Israel-Hamas conflict possibly spreading to include Iran and disrupting supplies in the Middle East have contributed to the rise in oil prices. Additionally, Federal Reserve Chair Jerome Powell’s cautious approach to future interest rate cuts based on recent data showing higher-than-expected job growth and inflation was seen as positive for oil prices.

A meeting held by top ministers from the Organization of Petroleum Exporting Countries (OPEC) and its allies chose to keep current oil supply policy unchanged on Wednesday, with some countries encouraged to increase compliance with output cuts while Russia announced a shift towards output cuts rather than export curbs. Iran’s vow to seek revenge against Israel for an attack that killed high-ranking Iranian military personnel on Monday has also impacted oil prices, as Iran plays a significant role in the oil market as the third-largest producer in OPEC.

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