April 20, 2024 4:32 am
Oil prices increase due to worries about reduced supply and indications of economic growth in the U.S.

Oil prices in Asia on Thursday increased due to concerns about lower supply, as major producers continue to implement output cuts. Additionally, signs of stronger economic growth in the U.S., the world’s largest oil consumer, also contributed to the rise in prices. Brent futures for June and U.S. West Texas Intermediate (WTI) futures for May both saw gains, with the June Brent contract and the May WTI contract rising for the past four days.

The uptick in oil prices can be attributed to various geopolitical factors, such as Ukraine’s attacks on Russian refineries affecting fuel supply and concerns about potential disruptions in the Middle East region due to the Israel-Hamas conflict. A meeting of top ministers from OPEC and its allies, including Russia, on Wednesday maintained the current supply policy and urged some countries to adhere to output cuts more strictly. Russia also announced a shift towards output restrictions rather than export curbs.

In addition to these factors, Federal Reserve Chair Jerome Powell’s cautious approach towards future interest rate hikes was viewed positively for oil prices as it indicated robust economic growth in the U.S. Iran’s vow of retaliation against Israel for a recent attack further added to concerns about supply disruptions, as Iran is a significant producer within OPEC.

Oil prices have been on an upward trend since early 2021, driven by increasing global demand and production cuts by major producers such as OPEC and Russia. The Organization of Petroleum Exporting Countries (OPEC) and its non-OPEC allies agreed in April 2020 to cut production by around 9% in a bid to support oil prices after they crashed during the COVID-19 pandemic.

The latest increase in oil prices comes amid ongoing tensions between Israel and Palestine over territorial disputes in Jerusalem and Gaza Strip. The Israeli military launched air strikes against Hamas targets after rockets were fired from Gaza into southern Israel earlier this week, leading to clashes that have killed at least 18 Palestinians.

The conflict has led some analysts to predict that tensions will escalate further, leading to increased uncertainty around oil supplies from key producers like Iran and Saudi Arabia.

Despite these risks, analysts believe that strong economic growth in major economies like China and India will continue to drive demand for oil throughout 2021.

Overall, while there are several factors contributing to recent fluctuations in oil prices

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