Oil prices rise amid supply tensions, shipping suspension
Date
2/27/2024 1:56:51 AM
(MENAFN) Early trading in the United States on Monday witnessed a surge in oil prices, driven by expectations of dwindling supplies and heightened concerns over potential disruptions to shipping routes. brent crude futures experienced an increase of 54 cents, or 0.66 percent, reaching USD82.17 per barrel by 16:17 GMT, while US West Texas Intermediate crude futures rose by 69 cents, or 0.9 percent, to USD77.18.
The upward momentum in oil prices was partly attributed to reports from the US Central Command indicating a near-miss incident involving a tanker flying the American flag, allegedly targeted by the Houthis in Yemen over the weekend. This incident follows a recent attack on another vessel by the Houthis, which resulted in the ship being stranded in the Red Sea and observed leaking fuel. These events have heightened concerns about potential disruptions to oil shipping routes, contributing to market uncertainty.
Analysts, including Phil Flynn from Price Futures Group, suggest that the focus is shifting back to supply dynamics, as robust demand continues to underpin market sentiment. Flynn emphasized the importance of the supply-demand balance, stating, "Demand is very strong, and in the end, it comes down to supply and demand." Additionally, market observers anticipate a potential uptick in refinery production capacity starting in March, following the completion of scheduled maintenance operations in American refineries. The US Energy Information Administration reported last week that refinery utilization rates in the United States reached 80.6 percent of capacity over the past two weeks, signaling a potential increase in supply in the near future.
Overall, the combination of supply concerns, heightened geopolitical tensions, and the anticipation of refinery capacity restoration has contributed to the recent uptick in oil prices. Market participants continue to closely monitor developments in both supply and demand dynamics, as well as geopolitical events, for further insights into the trajectory of oil prices in the coming weeks.
MENAFN27022024000045015682ID1107903603
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.