Oil Prices Are Rising Again: What’s Behind the Trend
29 June 14:36
On Monday, June 29, oil prices are rising moderately amid yet another escalation of tensions in the Middle East that occurred over the weekend. This was reported by "Komersant Ukrainian", citing Interfax-Ukraine.
As of 8:15 a.m., the price of August Brent futures on the London ICE Futures exchange stood at $72.21 per barrel, which is $0.22 (0.31%) higher than at the close of the previous trading session. On Friday, these contracts fell by $3.27 (4.3%) to $71.99 per barrel.
WTI crude oil futures for August delivery on the New York Mercantile Exchange (NYMEX) electronic trading platform have risen by $0.63 (0.91%) to $69.86 per barrel. At the close of the previous session, their price had fallen by $2.69 (3.7%) to $69.23 per barrel.
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Last week, Brent fell by 10.6% and WTI by 9% due to a rapid increase in fuel shipments through the Strait of Hormuz. However, over the weekend, the U.S. and Iran exchanged blows again, demonstrating the fragility of the truce they had reached. Tanker traffic through the Strait of Hormuz slowed again after Iran attacked ships, including a tanker linked to Qatar.
The U.S. military subsequently struck Iranian targets in the Strait area, and Tehran attacked U.S. military bases in Kuwait and Bahrain.
“There are still numerous risks in the oil market. However, traders seem to be focusing on what a further resumption of crude oil supplies would mean for the global balance of supply and demand,” ING analysts note.
“This calm seems surprising and clearly poses a significant risk of price increases should the resumption of supplies prove to be slow,” the ING report states.
Oil prices fell from the highs recorded at the start of Monday’s session after reports emerged that the U.S. and Iran had agreed to halt retaliatory strikes and had arranged to hold technical talks in the Qatari capital of Doha on Tuesday. The price of Brent crude had earlier risen to $73.39 per barrel, while WTI reached $70.85 per barrel.
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