Brent crude oil prices surge above USD87 per barrel, highest since April
(MENAFN) On Friday, the price of brent crude oil surged above USD87 per barrel, reaching its highest level since April, driven by several key factors influencing the global oil market. International benchmark Brent crude traded at USD87.52 per barrel at 10:22 a.m. local time (0722GMT), marking a slight increase of 0.10 percent from the previous session's closing price of USD87.43 per barrel. Meanwhile, American benchmark West Texas Intermediate (WTI) rose to USD84.10 per barrel, up 0.04 percent from its previous close of USD84.06 per barrel.
One significant factor contributing to the rise in oil prices was the Energy Information Administration's (EIA) report of a substantial 12.2-million-barrel decline in commercial crude oil stocks in the US. This significant reduction far exceeded market expectations, which had anticipated a much smaller decrease of about 400,000 barrels. Additionally, US crude oil production saw a decline of 27,000 barrels per day (bpd), settling around 13.58 million bpd for the week ending June 28. This drop in production further heightened supply concerns among traders and investors, thereby supporting upward pressure on oil prices.
Expectations of increased travel activity during the summer season also bolstered market sentiment, suggesting a potential rise in oil demand in the near term. Geopolitical tensions in the Middle East and the Red Sea, crucial routes for oil and fuel shipments, added to market anxieties, providing additional support to oil prices.
However, despite these bullish factors, negative economic indicators from the US tempered the upward momentum in oil prices. Reports showed that US private payrolls increased by 150,000 in June, falling short of market expectations. Additionally, annual wage growth slowed to 4.9 percent, its lowest rate since August 2021. Moreover, initial jobless claims rose by 4,000 to 238,000 in the week ending June 29, surpassing forecasts and signaling potential weakness in the US labor market and broader economy.
Overall, the combination of robust supply data, geopolitical tensions, and expectations of seasonal demand increases juxtaposed with economic uncertainties contributed to the complex dynamics influencing oil markets on Friday.
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