On Monday, oil prices inched higher on anticipated lower US interest rates and rebounded Chinese demand.
During the Asian afternoon trading, Brent futures for July delivery increased modestly by 0.46% to $84.37 per barrel. West Texas Intermediate futures ending in July increased by 0.33% to $79.84 a barrel.
However, both benchmarks later declined by -0.11% to $83.87 and -0.19% to $83.82 per barrel, respectively.
Crude prices held some gains from last week, as the hope of US interest rate reductions and boosting demand in major importer China stirred a surge in appetite for oil.
Moreover, markets were buoyed by the Washington government’s announcement that it had bought over 3.30 million barrels of crude to support refilling the Strategic Petroleum Reserve.
Meanwhile, Iran’s political stability is in sight after President Ebrahim Raisi and his foreign minister suffered a helicopter crash caused by bad weather.
The President’s tragedy and uncertainty come during the cooling Middle East tension. Notably, Israel and Iran have employed strikes against each other earlier this year.
Furthermore, Tehran has persistently criticized Jerusalem’s continued attacks on Gaza, which the nation held up over the weekend.
Meanwhile, worries about Middle East instability have kept Brent oil prices above $80.00 throughout 2024.
Iran Volatility Causes Oil Prices to Inch Higher
According to reports, oil prices have seen only slight movement despite Iran’s volatility following the helicopter accident.
Analysts observed that the crude market remains stable within a specific range, lacking new stimulus. They await clear guidance from the OPEC+ production policy to move beyond this range.
The Organization of the Petroleum Exporting Countries and Allies (OPEC+) is set to meet on June 1.
Moreover, the market is indifferent to geopolitical issues, likely because OPEC has significant spare capacity.
Meanwhile, oil markets stayed wary this week due to a range of upcoming signals regarding US interest rates and the economy. The Federal Reserve’s late April meeting and speeches from several officials are set to be released.
