Oil prices continue to rise, aiming for a second consecutive weekly gain, bolstered by geopolitical tensions in Europe and the Middle East, tightening supply concerns, and optimism surrounding global fuel demand growth amid economic recovery.
Brent crude edged up 49 cents to $91.14 a barrel, while U.S. West Texas Intermediate crude rose to $86.96 a barrel, both settling at their highest levels since October.
Analysts anticipate further upside in oil prices in the short term due to a positive economic outlook, ongoing supply constraints, and escalating geopolitical risks. The bank raised its 3-month price target for Brent to $95 a barrel.
This week, Brent and WTI are poised to register over a 4% gain, marking a second consecutive weekly increase. Iran’s pledge of retaliation against Israel and ongoing Ukrainian drone attacks on Russian refineries have contributed to supply concerns.
Israel has not claimed responsibility for the attack on Iran’s embassy compound in Syria. Meanwhile, the NATO official reported that Ukrainian drone attacks may have disrupted over 15% of Russian refinery capacity, impacting fuel production.
OPEC+ maintained its oil supply policy this week and urged member countries to enhance compliance with output cuts. ANZ analysts anticipate output to decline further in Q2 if adherence to quotas is tightened, potentially leading to inventory drawdowns.
Global heavy oil supply has also tightened following export cuts by Mexico and the United Arab Emirates.
JP Morgan analysts noted solid global oil demand growth of 1.4 million barrels per day in Q1, with March’s oil consumption estimated to exceed published estimates.
Investors are eagerly awaiting the U.S. March employment report for insights into the economy’s health and monetary policy direction.
