The oil price advances for the third day, heading towards a weekly gain.
In detail, Brent trades above 84 dollars a barrel after a two-day rise and remains above the 100-day moving average. West Texas Intermediate is approaching $80.
Overall, prices remain higher this year, helped by OPEC+ supply cuts, a recovery in global demand and recurring tensions in the Middle East. The Organization of the Petroleum Exporting Countries and its allies will meet next month to decide on production in the second half.
The latest geopolitical signals and macroeconomic data have pushed prices towards the end of the week. The price of oil is therefore increasing for reasons to be found in China, the USA and the Middle East.
Why is the price of oil rising?
While remaining at non-worrying levels, crude oil prices are rising. There is therefore an impact deriving from the latest geopolitical indications and macro data from the great powers China and the USA.
Specifically, the decline in crude oil inventories Americans, spurred by the increase in refineries, coincided with data released Thursday showing that the China’s oil imports in April they were higher than last year, following signs of improvement in commercial activity.
China’s exports and imports began to grow again in April after contracting the previous month, signaling improved demand.
“The continuous signs of strength of demand in China should see the commodity market remain well supported”ANZ Research said in a note.
Negotiations to end the fighting between Israel and Hamas have yielded no results, keeping concerns alive potential supply disruptions in the Middle East.
Israeli forces shelled the city of Rafah in the Gaza Strip on Thursday, Palestinian residents said. As the conflict continues, the possibility increases that other Middle Eastern countries will become involved, particularly Iran, Hamas’ main backer, a key producer.
“Israel’s bases for an intervention in Rafah and the growing tensions on its northern border remind us that geopolitical risks could persist at least through the second quarter of 2024″Citi analysts said in a note.
The bank’s analysts, however, predict a price decline until 2024with Brent averaging $86 a barrel in the second quarter and $74 in the third quarter, amid looser supply and demand fundamentals.
