Oil Prices Surge Amidst Global Tensions

Oil Prices Surge Amidst Global Tensions/AP

VoM News Desk | March 26, 2024 | 08:10 PM IST | Breaking News | Follow on Google News

Oil Prices Surge Amidst Global Tensions

Oil Prices Surge Amidst Global Tensions

Oil prices surged over 1% on Monday, driven by escalating tensions between Russia and Ukraine and unrest in the Middle East. Brent crude futures rose by $1.05, reaching $86.48 per barrel, while U.S. crude futures climbed $1.15, settling at $81.78. Both Brent and WTI benchmarks have shown steady growth this year, with Brent up nearly 11% and WTI around 12.5%.

Factors Impacting Oil Prices

Hiroyuki Kikukawa of NS Trading highlighted concerns about global oil supply due to attacks on Russian energy facilities, Ukrainian infrastructure, and the Israel-Hamas conflict. Recent drone attacks halved the capacity of a Russian oil refinery, adding to disruptions caused by Ukrainian assaults. In the Middle East, Israeli forces continued offensive operations in Gaza, while U.S. forces intercepted Houthi drones over the Red Sea.

OPEC’s Role and Market Dynamics

Tamas Varga of oil broker PVM noted ongoing post-pandemic economic recovery leading to modest upgrades in oil demand forecasts for 2024. Despite this, OPEC has maintained supply curbs, creating a substantial buffer to address genuine supply shortages. Varga emphasized the importance of this buffer in countering a sustained Brent rally above $90 a barrel.

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