Mumbai, 28 Jun (Commoditiescontrol): Crude oil prices saw an uptick in early Asian trading on Friday, positioning for a third consecutive weekly gain. The rise was driven by concerns over supply disruptions caused by escalating geopolitical tensions and adverse weather conditions, which outweighed indicators of weak demand.
Brent crude futures for August settlement, set to expire on Friday, rose by 15 cents, or 0.2%, reaching $86.54 per barrel. The September Brent contract also increased by 0.2%, trading at $85.44 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures for August delivery climbed 24 cents, or 0.3%, to $81.98 per barrel.
Despite signs of weak demand in the United States, the world's largest oil consumer, oil prices have maintained their upward trajectory. The recent price rally is primarily attributed to the intensifying tensions between Israel and Lebanon's Hezbollah. The potential for a wider conflict in the Middle East, which could involve significant oil exporter Iran, has raised concerns about supply stability.
The French foreign ministry expressed its alarm over the situation in Lebanon on Thursday, while Turkey reiterated its solidarity with Lebanon and called for regional governments to support stability.
Weather-related disruptions have further strained oil supplies. Heavy rainfall in Ecuador has led to a production decline of 100,000 barrels per day over the past week, as reported by FGE Energy. In the United States, the Gulf Coast, which houses a substantial portion of the country's energy and export infrastructure, faces potential impacts from adverse weather. The U.S. National Hurricane Center is tracking a weather system that could develop into a cyclone and threaten the region.
In contrast to these supply concerns, U.S. crude stockpiles have increased unexpectedly, reflecting subdued fuel demand. Government data released this week revealed a rise in crude inventories, which has exerted downward pressure on oil prices.
Nevertheless, expectations of record travel over the July 4th weekend in the U.S. could boost gasoline demand, potentially reducing stockpiles. Both Brent and WTI futures have seen a 1.5% gain this week.
As geopolitical tensions and weather-related risks continue to influence the market, traders remain vigilant, closely monitoring developments that could impact global oil supplies and prices.
(By Commoditiescontrol Bureau: 09820130172)
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