Oil Prices Are Rising Again: The Main Reasons
3 July 14:36
Oil prices are rising moderately on Friday, July 3, amid low trading activity due to the U.S. holiday, "Komersant Ukrainian" reports, citing Interfax-Ukraine.
The market remains cautiously optimistic about efforts to resolve the conflict in the Middle East. U.S. President Donald Trump said in an interview with CNBC that Washington is continuing negotiations with Iran, and that Tehran has agreed to “practically everything” the U.S. wants.
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Oil exports from the Persian Gulf countries are rapidly recovering following the reopening of the Strait of Hormuz to tanker traffic. Saudi Arabia has increased its supplies to levels nearly matching those recorded before the start of the military conflict in the Middle East in late February, Bloomberg reports, citing vessel tracking data.
The price of September Brent crude futures on the London-based ICE Futures exchange stood at $72.24 per barrel as of 8:15 a.m., up $0.44 (0.61%) from the previous trading session’s close. On Thursday, they rose by $0.23 (0.32%) to $71.8 per barrel.
WTI crude oil futures for August delivery on the New York Mercantile Exchange (NYMEX) electronic trading platform have risen by $0.35 (0.51%) to $69.04 per barrel. At the close of the previous session, their price had risen by $0.11 (0.16%) to $68.69 per barrel.
Regular WTI trading will not take place on Friday due to the U.S. Independence Day holiday, which is observed on July 4.
The rise in oil prices is linked to traders closing out short positions ahead of the long weekend, notes John Kilduff, a partner at Again Capital.
“Overall, the market’s focus has shifted from how much supply we might lose to how much supply will come onto the market,” he says.
It’s worth noting that a new escalation in the Middle East would quickly drive risk back into prices, as the Strait of Hormuz remains one of the key routes for the global oil market.
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