Oil driven by fear of escalation in the Middle East

(London) Oil prices continue to rise on Wednesday, following the rise in geopolitical tensions after the strike on the Iranian consulate annex attributed to Israel, and pending an announcement from OPEC+ .


Around 7:10 a.m., the price of a barrel of Brent from the North Sea, for delivery in June, rose 0.78% to $89.62.

Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in May, rose 0.79% to $85.81.

The two crude oil benchmarks continued to exceed their highest levels since the end of October, with Brent close to $90 per barrel.

“Increased geopolitical risks from escalating conflict in the Middle East, OPEC supply cuts and improving data from China are helping to fuel” this price rise, James summarized. Harte, of Tickmill.

Investors continue to worry about possible supply disruptions after Monday’s airstrike, blamed on Israel, which targeted the building next to the Iranian embassy in Damascus, killing at least 13 people, including seven military personnel. Iranians. Iran has vowed to retaliate.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies in the OPEC+ alliance, which are holding a technical meeting of their Joint Ministerial Monitoring Committee (JMMC) on Wednesday, must announce their intention to continue or not their current policy of cuts of production.

While “no policy changes” are expected following the recent agreement to extend current production cuts, “markets will closely scrutinize the details of the meeting to see whether policy is likely to change again in the coming months.” come,” noted James Harte.

Furthermore, the recent activity indices “stronger than expected for China, Japan and the United States” “bode well for the growth of global oil demand”, estimated DNB analysts.

Manufacturing activity in China started to rise again in March for the first time in six months, standing at 50.8 points, according to official data published on Sunday, a significant rebound compared to February (49.1).

Manufacturing activity in the United States also started to rise again in March, after 16 consecutive months of contraction.

Investors are also awaiting the release of US weekly commercial crude oil inventories from the US Energy Information Administration (EIA) for the week ended March 29.

The federation of professionals in the sector, the American Petroleum Institute (API), estimated Tuesday evening that crude stocks had fallen by around 2.29 million barrels last week, and those of gasoline by around 1. 4 million barrels. However, API data is considered less reliable than EIA data.


reference: www.lapresse.ca

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