Summer Surge: Oil Prices Anticipated to Rise Amid High Demand
Ongoing Conflict in Oil-Rich Middle East: Geopolitical Tensions Send Oil Prices Soaring as Houthi-Western Forces Engage in Protracted Battles
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Oil prices increased on Monday, driven by expectations of higher demand during the summer months. The international benchmark Brent crude traded at $79.97 per barrel, a 0.44% increase from the previous session, while the American benchmark West Texas Intermediate (WTI) traded at $75.83 per barrel, a 0.40% rise.
Supply concerns and geopolitical tensions in the Middle East also contributed to the price increase. The decline in the number of oil drilling rigs in the US, announced by Baker Hughes, and ongoing conflicts in the region, including attacks by Yemen's Houthi group on British and other vessels, supported price rises.
The market is also awaiting official data on US crude oil and gasoline inventories, to be released on Wednesday, which will provide insight into demand in the world's largest oil-consuming country. Additionally, the interest rate decision from the US Federal Reserve (Fed) due later in the week will be closely watched, as a potential cut in interest rates could impact oil prices.
Despite the rise in unemployment rate, non-farm employment data exceeded expectations, leading to predictions that the Fed may only cut interest rates once this year. The probability of a rate cut in September decreased significantly, putting downward pressure on oil prices. Experts are now focused on OPEC's monthly oil market report due Tuesday, which will provide indicators on the market supply-demand balance.
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