Oil rates surge on strong US economic data, Middle East tensions
(MENAFN) Oil rates rose on Tuesday, driven by strong economic indicators in the US and heightened geopolitical tensions in the Middle East, a region known for its significant oil reserves.
The international benchmark brent crude traded at USD88.40 per barrel, marking a 1.1 percent increase from the previous session's closing price of USD87.42 per barrel. Similarly, the American benchmark West Texas Intermediate (WTI) traded at USD84.77 per barrel, up by 1.3 percent from the previous session's close of USD83.71 per barrel.
The uptick in oil prices followed Monday's release of data indicating a turnaround in the US manufacturing sector, which had experienced a 16-month contraction. The US Institute of Supply Management's Manufacturing Purchasing Managers Index (PMI) surpassed market expectations in March, reaching a value of 50.3, signaling robust oil demand from the world's largest oil-consuming country.
Additionally, anticipation of interest rate cuts by major central banks worldwide contributed to the bullish sentiment in oil markets. Analysts predict that these rate cuts will stimulate economic activity and drive demand across various sectors, including the oil market.
Amidst these economic factors, ongoing conflict in the Middle East has added to the uncertainty. Israel's continued attacks on the Gaza Strip, despite a UN Security Council resolution calling for a cease-fire, have heightened tensions in the region. Furthermore, a missile strike targeting the Iranian Consulate in Damascus resulted in the death of a senior commander of Iran's Islamic Revolutionary Guard Corps (IRGC) and six other officers, further escalating tensions in the area, which hosts crucial energy supply routes.
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