Global oil prices edge higher amid summer demand

WEB DESK: Global oil prices experienced a slight increase on Monday as traders balanced anticipated summer demand and geopolitical tensions against the impact of a stronger dollar.

By 0850 GMT, Brent crude futures had risen by 15 cents, or 0.2 per cent, to $85.39 per barrel. Similarly, US West Texas Intermediate (WTI) crude futures increased by 13 cents, or 0.2 per cent, reaching $80.86 per barrel.

Both benchmarks had previously gained approximately 3 per cent in the preceding week, marking their second consecutive week of gains.

Tamas Varga, an analyst at oil brokerage PVM, highlighted the primary factor behind the price stability: the growing belief that global oil inventories will see a significant reduction during the northern hemisphere’s summer months due to seasonal demand for oil products.

Geopolitical issues in the Middle East and increased Ukrainian drone attacks on Russian refineries have also contributed to the firming oil prices.

In addition, the European Union on Monday agreed to a new set of sanctions against Russia in response to its ongoing conflict in Ukraine. These sanctions include a ban on reloading Russian liquefied natural gas (LNG) within the EU for further shipment to third countries.

In other developments, Ecuador’s state oil company Petroecuador declared force majeure on deliveries of Napo heavy crude for export. This decision followed the shutdown of a key pipeline and oil wells due to heavy rainfall, according to sources on Friday.

In the United States, the number of operating oil rigs decreased by three to 485 last week, the lowest level since January 2022, as reported by Baker Hughes on Friday.

As traders continue to navigate these various factors, the oil market remains poised for potential fluctuations driven by both demand expectations and geopolitical developments.

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