Oil prices rose due to a significant decline in U.S. distillate inventories and increasing tensions in the Middle East. Brent crude rose 0.57% to $71.18, while WTI gained 0.51% to $67.50. U.S. crude inventories increased contrary to expectations, and geopolitical tensions continue to escalate, impacting oil markets.
Oil prices experienced an increase in early trading on Thursday, attributed to a decrease in U.S. fuel inventories and escalating tensions in the Middle East. Brent crude futures climbed by 40 cents, or 0.57%, reaching $71.18 per barrel, while U.S. West Texas Intermediate crude (WTI) rose by 34 cents, or 0.51%, to $67.50.
The surge in oil prices followed U.S. government data indicating a greater-than-anticipated drawdown in distillate inventories for the previous week. Specifically, distillate inventories, which encompass diesel and heating oil, decreased by 2.8 million barrels, far exceeding the expected drop of 300,000 barrels as forecasted by a Reuters poll.
Conversely, U.S. crude inventories increased by 1.7 million barrels, surpassing the anticipated rise of 512,000 barrels. Furthermore, global risk premiums heightened following Israel’s recent ground operation in Gaza, which ended a two-month ceasefire. Additionally, the U.S. has conducted airstrikes against Houthi positions in Yemen as a response to attacks on Red Sea shipping.
In the broader geopolitical context, Ukrainian President Volodymyr Zelenskiy mentioned the possibility of a temporary cessation of strikes on energy facilities in the ongoing conflict with Russia, hinting at a potential ceasefire that may allow for the easing of sanctions and a return of Russian oil supplies.
Trump’s Middle East envoy, Steve Witkoff, disclosed plans for further discussions between U.S. and Russian officials this Sunday in Saudi Arabia, aimed at negotiating an end to the war. Moreover, in the Americas, Chevron’s CEO has requested a 60-day extension to finalize operations in Venezuela, extending beyond the initial April 1 deadline, as Venezuela’s state-owned PDVSA seeks to maintain oil exports from its partnership with Chevron.
In summary, rising oil prices were driven by a significant drop in U.S. distillate inventories and ongoing tensions in the Middle East. The observed fluctuations in oil markets were influenced by geopolitical developments, particularly Israel’s military actions and U.S. airstrikes in Yemen. Additionally, discussions surrounding potential peace talks between Russia and the U.S. could further impact future oil supply and prices.
Original Source: www.cnbc.com
