Thu. Apr 25th, 2024

Oil prices edged higher on Tuesday, fueled by ongoing tensions in the Middle East. However, gains were limited by concerns about weakening demand and increasing oil production outside OPEC.

Brent crude futures climbed nearly half a percent to $82.69 per barrel, while the U.S. crude contract rose slightly over half a percent to $78.33.

The fragile ceasefire hopes in the Israel-Hamas conflict and attacks by Yemen’s Houthis kept a floor under prices. However, traders seem less fazed by these ongoing issues, believing disruptions are temporary.

Another factor limiting price surges is the expectation of rising oil supply. Russia, the world’s second-largest exporter, saw a fire at a refinery due to a Ukrainian attack, but this wasn’t a major concern. The bigger picture shows non-OPEC producers like the United States, Brazil, and Guyana are expected to ramp up production, potentially reaching record highs.

Adding to the demand worries is China, the top oil importer. While crude imports increased compared to 2023, they’ve been softening recently.

The market now awaits reports from OPEC, the IEA, and the EIA, hoping for any positive signs on demand to counter the bearish sentiment.