Oil Prices Rise Amid Middle East Tensions and Low Inventory Levels

Oil prices moved higher on Thursday despite easing global trade tensions, with analysts citing low inventory levels and renewed geopolitical risks in the Middle East as key drivers.

At 12:03 GMT, Brent crude futures were trading 31 cents higher at $68.83 per barrel, up 0.5%, while U.S. West Texas Intermediate (WTI) crude rose 61 cents, or 0.9%, to $66.99 per barrel.

Inventory Tightness Signals Strong Demand

John Evans of PVM Oil Associates noted that the market is reacting to a tightened inventory environment. Despite production increases, recent reports from the International Energy Agency (IEA) indicate that global stockpiles are not growing, suggesting robust oil demand.

Geopolitical Flashpoints Add to Volatility

Geopolitical concerns resurfaced with drone attacks on oilfields in Iraq’s Kurdistan region, which reportedly reduced output by up to 150,000 barrels per day, leading to multiple infrastructure shutdowns. Simultaneously, renewed attention to Israel’s strikes in Syria has added tension to an already fragile region.

“Oil thinking has been distracted from the Middle East, and the reminders of Israel’s attacks and Kurdistan’s disruptions are timely,” said Evans, suggesting that geopolitical risk premiums are again becoming relevant in oil price movements.

Trade Developments Offer Mixed Signals

On the trade front, U.S. President Donald Trump hinted at tariff-related letters being sent to smaller countries and expressed optimism over potential agreements with China and the European Union, including cooperation on illicit drug trade.

However, Ashley Kelty, analyst at Panmure Liberum, warned that despite near-term strength, volatility will persist due to uncertainty surrounding U.S. tariffs and their impact on global economic growth.

Market Outlook: Tight Now, But Risks Remain

UBS commodities analyst Giovanni Staunovo noted that current indicators suggest the physical oil market remains tight, but trade tensions could cap demand growth, posing downside risks to future prices.

Get Latest News Live on MTIMES along with Breaking News and Top Headlines, Political News and around The World.

You May Like

Trending Searches Today |

PM Modi Sets $20 Billion Trade Target with Brazil by 2030

“India Struck Pakistan Hard and Smart”: Tharoor Praises Operation Sindoor in the US

Honeymoon Turns Tragic: Wife Sonam Arrested for Plotting Husband Murder, Meghalaya

Bridge Collapse in Vadodara: 10 Dead, Several Injured, Rescue Operations Underway

Shubhanshu Shukla to PM Modi from Space: “16 Sunrises, 16 Sunsets – Earth Has No Borders”

NEET-PG 2025 to Be Held on August 3: Supreme Court Allows NBE Extension, Denies Further Delay