Oil prices edge higher amid demand hopes, geopolitical tensions
2024.06.24 21:48
Investing.com– Oil prices rose slightly in Asian trade on Tuesday as traders held out for an increase in demand during the summer season, while concerns over supply disruptions in Russia and the Middle East also kept crude well-bid.
Prices were close to their highest level since early-May. But further gains in oil were held back by a relatively strong dollar and anticipation of more cues on U.S. interest rates.
expiring in August rose 0.1% to $86.07 a barrel, while rose 0.1% to $81.72 a barrel by 20:51 ET (00:51 GMT).
Markets bet on summer demand boom
Oil prices advanced in recent sessions, underpinned by expectations that demand will improve as travel picks up pace during the summer season.
This notion was furthered by recent data showing an unexpected draw in U.S. inventories, with gasoline stockpiles declining.
But just how much demand will improve in the coming months remained in doubt, especially as the U.S. economy grapples with high interest rates and sticky inflation. This notion boosted the dollar, which also limited gains in oil prices.
Focus this week is on key data, which is the Federal Reserve’s preferred inflation gauge, for more cues on the world’s biggest fuel consumer.
Outside the U.S., deteriorating economic conditions in Europe pointed to dwindling demand in the region.
Doubts over an economic recovery in China also remained in play, as traders awaited more stimulus measures in the world’s biggest oil importer.
Israel-Hamas, Russia-Ukraine tensions remain in play
Persistent geopolitical disruptions in the Middle East and Russia also kept concerns over potential supply disruptions in play.
Israel kept up its pace of air strikes on Gaza, while also pushing further with its ground assault on Rafah. A ceasefire with Hamas appeared to be a distant prospect, while reports of a potential escalation in the conflict into an all-out war with Hezbollah also came into play.
In Russia, Ukraine said it had damaged more than 30 Russian oil refineries, as Kyiv continued to target Russia’s key oil producing infrastructure.
