Brent Crude Oil Prices Climb on Demand Optimism and Middle East Tensions

Team FS

20/Sep/2024

Brent crude oil futures traded around $74.6 per barrel, indicating a second weekly gain.

US refineries plan the lightest maintenance in three years, boosting demand outlook.

Fears of Middle East conflict and reduced Libyan production support higher oil prices.

On Friday, Brent crude oil futures traded around $74.6 per barrel, positioning themselves for a second consecutive weekly gain. This upward movement is driven by a combination of demand optimism and potential supply risks, particularly amid escalating tensions in the Middle East.

Recent reports suggest that US refineries are planning their lightest maintenance in three years, which is likely to enhance oil demand in the upcoming months. This positive outlook follows the Federal Reserve's larger-than-expected interest rate cut, which is anticipated to stimulate economic activity and further improve the prospects for US fuel consumption.

Simultaneously, fears surrounding a broader conflict in the Middle East, particularly with Israel advancing toward the Lebanon border, have raised concerns about Iran's involvement, a significant oil producer. This geopolitical uncertainty is contributing to the support of oil prices, as investors remain cautious about potential disruptions to crude supplies.

Additionally, oil prices have benefited from reduced Libyan production and exports, coupled with a larger-than-expected drawdown in US crude inventories reported last Wednesday. This combination of factors has bolstered market sentiment, driving Brent crude oil prices higher as traders assess the implications for global supply and demand dynamics.

West Texas Intermediate (WTI) crude oil futures mirrored this trend, trading around $70.8 per barrel, also on track for a second weekly gain. The dual movement in both Brent and WTI highlights a strengthening outlook for the oil market as it navigates the complexities of demand recovery and geopolitical challenges.

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Brent Crude Oil Prices Climb on Demand Optimism and Middle East Tensions

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