Oil Prices Rise Amid Geopolitical Tensions and Strong Demand

by InkWell April 5, 2024 · WTI Crude Oil Analysis / Commodities

WTI crude futures were hovering around $87 per barrel on Friday, poised for a second consecutive week of gains. Rising geopolitical tensions in oil-rich areas fuel this upward trend, and OPEC+ initiatives to limit supply and an optimistic forecast for energy demand are driving up oil prices. This surge was partly triggered by Iran’s promise of retaliation against Israel following an assault on the Iranian embassy in Syria, resulting in the death of top Iranian officials.

Meanwhile, in Eastern Europe, disruptions caused by Ukrainian drone strikes on Russian refineries have cut Russian fuel production by over 15%, as noted by a NATO official on Thursday. Additionally, OPEC+ decided to stick to its existing oil supply strategy this week, urging certain countries to improve their adherence to production reductions.

On the demand front, robust US economic indicators have uplifted the demand outlook for the leading oil consumer. Market participants are also keenly anticipating the upcoming US monthly employment report.