Oil prices extends gains amid hopes of increased seasonal demand, strategic reserve purchases
Date
6/11/2024 4:37:20 AM
(MENAFN) At the start of trading on Tuesday, oil prices extended their gains for the second consecutive day, buoyed by optimism surrounding rising seasonal fuel demand and potential US purchases to bolster the strategic petroleum reserve. This positive momentum persisted despite a stronger dollar, which tempered the overall gains. By 0038 GMT, brent crude futures had increased by 28 cents, or 0.3 percent, reaching USD81.91 per barrel, while US West Texas Intermediate (WTI) crude futures rose by 31 cents, or 0.4 percent, to USD78.05 per barrel.
On Monday, crude prices surged approximately three percent, marking their highest levels in a week. This rally was fueled by expectations of heightened fuel demand during the summer months, countering the dampening effects of a stronger dollar and forecasts that the US Federal Reserve would maintain elevated interest rates for an extended period. Hiroyuki Kikukawa, president of NS Trading, highlighted the market's support from these demand expectations and the possibility of the US government increasing the strategic petroleum reserve if WTI crude prices stay below USD79 per barrel. Kikukawa noted that as WTI crude approaches its 200-day average price, oil prices are likely to stabilize near current levels for the foreseeable future.
US Energy Secretary Jennifer Granholm indicated last week that the US might expedite efforts to replenish the strategic petroleum reserve, with maintenance work projected to be completed by the end of the year. Granholm revealed that Washington aims to repurchase oil at around USD79 per barrel, suggesting a proactive approach to addressing the reserve's shortfall. This strategic move, combined with anticipated summer demand, has contributed to the recent bullish sentiment in the oil markets.
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