Global oil prices hit two-month high amid summer travel surge

WEB DESK: Oil prices surged nearly 1 per cent on Tuesday, reaching their highest levels in two months, buoyed by expectations of increased summer demand and fears of supply disruptions due to Hurricane Beryl.

By 1315 GMT, Brent crude futures climbed 75 cents, or 0.87 per cent, to $87.35 per barrel, marking their peak since April 30. Similarly, US West Texas Intermediate (WTI) crude rose 84 cents, or 1.01 per cent, to $84.22, hitting its highest since April 26. Both benchmarks had gained approximately 2 per cent in the preceding session.

The uptick in US gasoline demand is a significant factor, coinciding with the upcoming Independence Day holiday, as predicted by the American Automobile Association. They anticipate a 5.2 per cent increase in holiday travel compared to last year, with car travel alone expected to rise by 4.8 per cent.

Additionally boosting oil prices is the mounting geopolitical risk in the Middle East and signs of easing inflation in the United States, which have reignited expectations of potential interest rate cuts.

Meanwhile, concerns over Hurricane Beryl intensified as it strengthened into a Category 5 storm on Monday, prompting fears of disruptions to US refining and offshore production. The storm’s path across the eastern Caribbean is closely monitored for its potential impact on oil infrastructure.

The combination of rising demand forecasts and geopolitical tensions underscores the current bullish sentiment in the oil market, as investors closely monitor developments in both supply and demand dynamics globally.

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