Oil Prices Rise in Asian Trading Amid Growing Demand and Tensions
Positive Trends in Early Asian Trading
By Colleen Howe
Oil prices saw an uptick in early Asian trading, fueled by a combination of increased demand and mounting tensions in the Middle East. This surge follows a rally in U.S. futures to a five-month high during the previous session.
Market Movements
Futures for June Delivery
The futures for June delivery climbed 37 cents to reach $87.79 per barrel by 0046 GMT. Meanwhile, the May contract for U.S. West Texas Intermediate (WTI) crude futures rose by 32 cents, hitting $84.03 a barrel.
Factors Driving Prices
Market analyst Tony Sycamore attributed the price increase to stronger-than-expected manufacturing data from the US and China. Both countries saw manufacturing activity expand in March, indicating a potential rise in oil demand. China, the world’s largest crude importer, and the U.S., the biggest consumer, play crucial roles in shaping oil prices.
Future Predictions
Sycamore suggested that U.S. futures could surge to the mid-$90s if they surpass a technical resistance level of $84.00 per barrel. The last time the prompt-month WTI contract hit $95 per barrel was back in August 2022. The front-month contract settled at $83.71 per barrel on Monday, marking the highest close since October 2023.
International Concerns
In the Middle East, an Israeli strike on Iran’s embassy in Syria resulted in the death of seven military advisors, including three senior commanders. This incident marked an escalation in a long-standing conflict that has raised apprehensions about potential disruptions in oil supply.
Supply Concerns and OPEC Meeting
ANZ analysts noted that the market had not previously been worried about supply disruptions, but Iran’s potential involvement could jeopardize its oil supply. The Organization of Petroleum Exporting Countries (OPEC) is scheduled to hold a meeting on Wednesday to review market conditions and members’ adherence to output cuts aimed at reducing supply by 2.2 million barrels per day until the end of the second quarter.
