Oil prices held near a 5-month high, with rising geopolitical risks in the Middle East and tight supplies from Mexico helping to support prices.
Brent crude futures rose to about $88 per barrel after rising 0.5% on Monday, while West Texas Intermediate crude reached about $84. An Israeli air strike on the Iranian embassy in Syria killed a senior military commander and others, and Tehran said it would respond decisively. Pemex, Mexico’s state-run oil company, said it plans to essentially stop exports of Maya crude over the next few months.
Hedge funds are increasingly betting on the rise of crude oil, with money managers’ net long positions on the global Brent index reaching a 13-month high, according to data from the ICE Futures Europe exchange. A number of outstanding oil contracts also recovered to reach almost their highest levels since late 2021.
Crude oil rose 14% this year as production cuts implemented by the Organization of the Petroleum Exporting Countries and its allies offset rising supplies from outside the organization. The OPEC+ alliance is expected to confirm its current production policy at a meeting scheduled for Wednesday, which will lead to a deficit until the end of the year, according to BloombergNEF.
The focus on supplies on Monday helped oil prices get rid of the impact of data showing strong US manufacturing activity, which contributed to bond traders pricing in a smaller interest rate cut by the US Federal Reserve this year, and the dollar index rose to its highest level in two months. Rising interest rates and a stronger dollar are usually a bearish trend for commodities.
2024-04-02 03:19:21
#Oil #prices #highest #level #months #supply #risks #East #Economy #Bloomberg
