Business Oil regains its colors amid geopolitical tensions

Oil regains its colors amid geopolitical tensions

Around 11:50, Brent gained 9.33% to 22.27 dollars compared to Wednesday. In New York, the WTI was worth $ 15.68 a barrel, up 13.79%.

Oil prices were up Thursday, in line with the previous day, fueled by new tensions in the Middle East overshadowing a fall in demand and the near saturation of storage capacity.

Around 09:50 GMT (11:50 CET), a barrel of Brent from the North Sea for delivery in June gained 9.33% to 22.27 dollars compared to the closing on Wednesday, the day after a low since June 1999, under 16 dollars.

In New York, the US WTI price for June delivery was $ 15.68 a barrel, up 13.79%.

Nonetheless, black gold prices remain at their lowest levels in years, as a result of a collapse in demand caused by the plunge in economic activity due to the restrictions imposed throughout the planet to fight the Covid-19 pandemic.

One option to support prices is “to fuel geopolitical tensions in the Middle East, which creates fears for the supply of crude,” said Ipek Ozkardeskaya of Swissquote Bank.

“That’s what Donald Trump is doing right now,” she added.

The President said on Twitter on Wednesday “he has ordered the US Navy to shoot down and destroy any Iranian craft that harasses our ships at sea.”

The Gulf is a major artery for the export of crude oil to world markets, and any increase in tension inevitably has a bullish impact on the price of black gold.

Investors are analyzing this tweet “as a threat to production and exports” from this oil-rich region of the globe, confirms Bjornar Tonhaugen of Rystad Energy.

“The storm is not over” for crude prices, warns Carlo Alberto De Casa, analyst at ActivTrades.

“With the approach of the next contract expiration (in a few days for Brent and in a month for WTI, note), it is quite possible that prices will become negative again as the tanks are full”, a it completed.

The US Energy Information Agency (EIA) reported a massive 15 million barrel increase in US crude reserves last week on Wednesday.

In Cushing, Oklahoma, where the barrels serving as a reference for the WTI are stored, the reserves are approaching their maximum.

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