Key points:
In early Asian trading, oil prices rose, with Brent crude adding 37 cents to $76.95 per barrel, while U.S. West Texas Intermediate (WTI) increased by 35 cents to $73.59 per barrel.
These price gains come as market participants reacted to concerns over possible supply disruptions in the Middle East. Israel’s Defence Minister Yoav Gallant reiterated plans to strike Iran, one of the region’s major oil producers, heightening fears of a broader conflict that could affect oil exports.
See: Oil prices are consolidating around $73.55 after a recent high of $78.44 as shown on the VT Markets app.
Additionally, U.S. fuel demand saw a sharp spike following Hurricane Milton’s landfall on Florida’s west coast. The storm triggered tornadoes and caused a surge in fuel purchases, leading to fuel shortages at roughly 25% of the state’s gas stations. This sudden demand added upward pressure to oil prices, as market participants braced for potential supply constraints.
While geopolitical tensions have supported oil prices, underlying market fundamentals suggest a more cautious outlook.
The U.S. Energy Information Administration (EIA) recently downgraded its oil demand forecast for 2025 due to weakening economic activity in both China and North America.
The EIA’s data release also showed an increase in U.S. crude inventories, with stocks rising by 5.8 million barrels to 422.7 million barrels last week.
This inventory build was larger than anticipated, although still lower than earlier estimates from the American Petroleum Institute.
Previously: Oil Retreats After Weekly Rise in Over a Year
With traders focusing on both short-term disruptions and longer-term demand concerns, we expect oil prices to remain volatile, fluctuating with incoming geopolitical and economic developments.
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