The rises in crude oil prices: What is behind these increases ?

5 Nisan 2024

Today’s market analysis on behalf of Antonio Ernesto Di Giacomo – Market Analyst Latam at xs.com

 

Oil prices have maintained an upward trend in the past week, marking a significant event as Brent crude surpassed $90.00 per barrel and West Texas Intermediate (WTI) reached $86.00 per barrel for the first time since last year.

A series of both regional and geopolitical events of great relevance have driven this steep ascent. Among these, the attacks by Ukraine on Russian energy facilities stand out, generating additional tensions in an already turbulent region. Furthermore, the escalation of conflict in the Middle East has contributed to uncertainty in global energy markets.

One of the most notable events was the attack by a Ukrainian drone on a critical refinery in Russia. Although damages seem limited, this incident has added pressure to an already tense situation between the two countries. Russia, on its part, has faced a series of attacks on its energy infrastructure while simultaneously taking action against Ukraine.

In the Middle East, Iran’s promise of retaliation against Israel for an attack resulting in the deaths of high-ranking Iranian military officials has further fueled concerns about the region’s stability. Such tensions often directly impact oil prices, given the importance of the Middle East in global crude production and export.

On the other hand, the OPEC+ meeting has generated expectations and some stability in the markets. The decision to maintain the crude supply policy unchanged and the call for compliance with agreed production cuts have been interpreted as a measure to maintain balance in the oil market. However, regional tensions and geopolitical events have proven to be factors that can quickly destabilize this balance.

In conclusion, this week’s rise in oil prices is closely linked to geopolitical and regional events that have increased uncertainty in global energy markets. As long as tensions between producing countries persist and threats to security in crucial oil-producing regions continue, prices are likely to continue experiencing volatility in the short term.