The price of Brent crude oil reached a multi-month high, exceeding $86 per barrel

The price of Brent crude oil for May delivery on the ICE platform exceeded $86 per barrel during trading today, UNN reports.

Details

According to Quantum Commodity Intelligence, oil futures started the week on a solid footing in the early hours of European trading on Monday, with new four-month highs being recorded after the release of Chinese economic data. Brent crude oil futures on ICE for May 24 were trading at $86.20 per barrel at 8:50 a.m. Greenwich time (10:50 a.m. Kyiv time). At the same time, on the NYMEX, WTI crude oil was trading at $81.99 per barrel on April 24.

"WTI and Brent oil hit four-month highs after the IEA changed its 2024 supply and demand forecast to a deficit amid an expected prolonged period of production cuts by OPEC+," commented Ole Hansen, an analyst at Saxo Bank.

Oil prices also rose in Asian trading on Monday, increasing their growth compared to last week by almost 4% amid the view that supply is shrinking and risks are being exacerbated by further attacks on Russian refineries, Reuters reports.

A Reuters analysis showed that about 7% of Russia's oil refining capacity was shut down in the first quarter as a result of the attacks. Refineries process and export crude oil grades to several markets, including China and India.

In the Middle East, Israeli Prime Minister Benjamin Netanyahu confirmed on Sunday that he will go ahead with plans to advance into the Rafah enclave in the Gaza Strip, despite pressure from Israel's allies. German Chancellor Olaf Scholz said the move would make regional peace "very difficult.

This week, investors are also watching the outcome of the two-day meeting of the US Federal Reserve, which ends on Wednesday. This will bring more clarity to the timing of interest rate cuts, Tony Sycamore, market analyst at IG, said in a note. The Fed is likely to keep rates unchanged this month, while the possibility of a rate cut at the June meeting "is now a coin flip," Sycamore said, as quoted by Reuters.

Lower interest rates will stimulate demand in the United States, the world's largest oil consumer, which will support oil prices, the publication points out.

Addendum

Both brands showed growth last week, despite a drop on Friday. For most of last month, oil fluctuated in a certain range, but on Thursday, an optimistic report on demand from the International Energy Agency led to a rise in prices to the highest level since November, the publication points out.

The agency strengthened its demand forecasts for the fourth time since November, as Houthi attacks in the Red Sea forced crude oil and fuel tankers to divert, reducing the amount of oil available to consumers. For the first time, the IEA also forecast a slight supply deficit this year instead of a surplus.

Demand for fuel in the US also supported prices as refineries completed some projects, the publication notes.

At the close of trading on Friday, Brent and WTI futures for 2024 were reportedly up 11% and 13%, respectively.

Oil prices rise after attacks on russian refineriesMar 18 2024, 02:00 AM • 120404 views