On Thursday, oil prices jumped as geopolitical fears mounted after Israel hit Rafah, dwarfing the impact of poor US Gross Domestic Product (GDP) growth.
The US West Texas Intermediate (WTI) crude futures for June delivery lifted 0.92% to $83.57 per barrel on April 25. Moreover, industry watchers expect the American petroleum benchmark to increase 0.34% to $83.85 a barrel in the following market session.
Likewise, Brent oil June futures spiked by 1.43% to $89.28 a barrel, rebounding from the 0.45% tumble a day earlier. Furthermore, market analysts predict a 0.06% gain to $89.33 per barrel in the coming trading day.
In the preliminary reading for Q1, the US reported that its GDP advanced by 1.60% quarter-over-quarter. It marked a steep deceleration from the 3.40% widening in last year’s fourth quarter, sharply below the forecasted 2.50% expansion.
Meanwhile, the Energy Information Administration reported a draw of 6.37 million barrels in crude oil inventories in the week ending April 19. It was a remarkable shift from the preceding week’s 2.74-million-barrel build and the market consensus of 1.60 million barrels.
During the same week, the American Petroleum Institute posted a shortfall of 3.23 million barrels in crude stock. The figure reversed the 4.09 million barrels added the week ending April 12 and defied projections of a 1.80-million-barrel surplus.
Israel Strike Renews Oil Supply Disruption Worries
Despite mounting international pressure, Israel bombarded the Gaza Strip’s southern city of Rafah, causing turmoil in the Middle East’s oil market. The move came a day after a top Hamas political official said the group is open to a five-year truce.
Rafah currently houses over half of Gaza’s population, as displaced residents migrated to the city to seek refuge. Various organizations, including the UN, tried but failed to dissuade Israeli Prime Minister Benjamin Netanyahu from launching further attacks.
According to geopolitical experts, Israel’s actions may lead to severe sanctions, which may impact the region’s oil trade. Lastly, Houthi rebels may ramp up their assaults on maritime vessels in the Red Sea in response to the airstrikes on Rafah.
