Oil prices stabilize near 2-month highs on summer demand, economic outlook
(MENAFN) Oil prices stabilized on Tuesday, remaining close to two-month highs reached in the previous session. brent crude futures edged up 20 cents to USD86.80 a barrel by 0142 GMT, following a 1.9 percent gain in the previous session, marking their highest closing level since April 30. Similarly, U.S. West Texas Intermediate (WTI) crude rose 13 cents to USD83.51 a barrel, after climbing 2.3 percent to its highest point since April 26.
The surge in oil prices is driven by expectations of increased fuel demand during the summer travel season in the United States, the world's largest oil consumer. With the Independence Day holiday approaching this week, gasoline demand is anticipated to rise sharply. This seasonal uptick in demand typically supports oil prices as refineries ramp up production to meet increased consumption levels.
Meanwhile, concerns about supply disruptions are also influencing market sentiment. Hurricane Beryl, which intensified into a Category 4 storm in the Caribbean on Monday, has raised fears of potential disruptions to U.S. refining operations and offshore oil production. The storm is forecasted to move towards Mexico’s Bay of Campeche, potentially affecting oil production in that region.
The outlook for oil prices is further influenced by expectations surrounding U.S. monetary policy. Speculation of a U.S. interest rate cut has also contributed to market optimism, as lower interest rates could stimulate economic growth and fuel demand. The combination of these factors underscores a complex and dynamic environment in global oil markets, with both demand-side dynamics and supply-side risks playing significant roles in price movements.
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