Oil prices surge amidst geopolitical tensions and US crude oil reserves data
8 February 2024 17:27
A barrel of West Texas Intermediate, due for March delivery, is valued at approximately £56.44, marking an increase of 0.97 percent. The price of Brent oil also witnessed a growth of 1.02 percent and is currently priced at around £60.60, according to Reuters. It's notable that the price of Brent oil surpassed the £60 barrier for the first time since 1st February 2024.
Global oil prices
So, what's impacting the prices? As explained by Reuters, one major contributing factor is the data shared by the American Department of Energy (DoE). According to their report, US crude oil reserves increased in the previous week by nearly 5.52 million barrels, or 1.13 percent, reaching a total of 427.43 million barrels.
The DoE further stated that gasoline reserves recorded a decrease over the same period by approximately 3.15 million barrels, or 1.24 percent, taking the total down to around 250.99 million barrels. These two segments of information, indicating a shift towards refinery conservation in the US, have had a significant impact on global oil prices.
In addition, the evolving situation in the Middle East has caught investors' sight. Israeli Prime Minister Benjamin Netanyahu's recent rejection of Hamas's proposition for a ceasefire, and the offer to return hostages held in the Gaza Strip, had implications. However, Antony Blinken, US Secretary of State, suggests that negotiations are still a viable possibility.
Under the leadership of senior official Khalil Al-Hayya, a Palestinian Hamas delegation was expected to head to Cairo on Thursday for ceasefire discussions with Egypt and Qatar. Meanwhile, in the Middle East, Houthi militants continued their barrage of rockets at ships off the Yemeni coast.
As reported by Reuters, a leader of the pro-Iranian militia Kataib Hezbollah, Abu Baqir al-Saadi, was killed in an attack by an American drone on Wednesday evening in east Baghdad. The attack was part of the US's response to the killing of three of its soldiers in Jordan.
"Oil prices are hinged on the idea of a soft landing and predicted supply shortages in the second half of this year," expounded Priyanka Sachdeva, senior market analyst at Phillip Nova.
