Brent crude trades at $86.48/bbl as oil prices rise due to increased supply concerns

The president of NS Trading, a division of Nissan Securities, Hiroyuki Kikukawa, has brought attention to growing worries regarding the world’s oil supplies.

Money

By Sneha Sengupta On Mar 25, 2024

Amid growing tensions between Russia and Ukraine and increased instability in the Middle East, oil prices rose more than 1% on Monday. U.S. oil futures increased $1.15, or 1.4%, to settle at $81.78, while Brent crude futures increased $1.05, or 1.2%, to $86.48 a barrel by 1423 GMT.

What’s driving the oil prices?

The president of NS Trading, a division of Nissan Securities, Hiroyuki Kikukawa, has brought attention to growing worries regarding the world’s oil supplies.

Attacks on Ukrainian energy infrastructure, Russian energy facilities, and the ongoing Israel-Hamas conflict are the easons for the increased tensions.

A recent drone attack over the weekend reduced the capacity of yet another Russian oil refinery in half, according to sources reported by Reuters. This incident is part of a string of attacks by Ukraine this month that, based on figures from Reuters, have already eliminated 7% of the nation’s refining capacity.
Despite U.S.-backed efforts by Qatar and Egypt to mediate a ceasefire between Israel and Hamas, Israeli soldiers in the Middle East resumed their onslaught in Gaza on Sunday. According to U.S. Central Command, on Saturday, the Houthis fired four missiles at an oil tanker controlled by China.

The U.S. forces intercepted six Houthi unmanned aerial vehicles over the southern Red Sea.

While the post-pandemic economic recovery is continuing, OPEC has maintained its supply limitations, according to Tamas Varga of oil trader PVM. This has led to minor revisions in oil demand expectations for 2024 following an inflation-induced slump.Varga underlined how important this cushion is to preventing a persistent Brent surge beyond $90 per barrel.