Oil Prices Increase Ahead of OPEC+ Meeting
Oil prices increase in the global commodity market ahead of OPEC+ meeting and Iran plan to retaliate the assassination of Ismail Haniyeh, the head of the Palestinian Hamas group’s political bureau.
The OPEC+ Joint Ministerial Monitoring Committee are expected to meet today with market expectation that the committee would not change output policy.
The oil market rally was also supported by positive demand outlook in the US, supported by inventory data from the Energy Information Administration (EIA).
Brent rose by 0.7% to $81.44 per barrel as geopolitical tension in the Middle East suggest supply could be tightened further.
The American benchmark West Texas Intermediate (WTI) traded at $78.33 per barrel at the same time, a 0.53% increase from the previous session that closed at $77.91 per barrel.
Haniyeh was killed in an Israeli airstrike on his Tehran apartment the day after attending Iranian President Masoud Pezeshkian’s inauguration, according to announcements made by Iran and Hamas on Wednesday morning.
Though Israel has remained silent about Haniyeh’s death, Prime Minister Benjamin Netanyahu has hinted at Tel Aviv’s involvement in his assassination.
EIA reported that there was a drop in crude stocks in the US, the world’s largest oil-consuming country. According to data released by the EIA late Wednesday, US commercial crude oil inventories decreased by 3.4 million barrels to 433 million barrels during the week ending July 26.
The drop in inventory was well above the market prediction of a 1.6 million barrels fall. However, the rise of the US dollar against other currencies limited further price rises. Strong dollar ramped up prices for non-US currency holders and discouraged investors.
The US dollar index rose by 0.09% to 104.18 at 9.58 a.m. local time (0658 GMT), compared to the previous trading session.
Yesterday, oil prices rallied with growing Middle East tensions. ICE Brent settled more than 3.5% higher on the day.
While Israel has not claimed responsibility for the assassination, Iran has said that it will retaliate as the assassination took place on Iranian soil.
The region and oil market will now be on tenterhooks to see how and if Iran retaliates, ING commodity strategists said in a note.
Iran’s new President had previously said that he would strive to normalise economic and international relations through the lifting of US sanctions.
If so, the Iranian regime might try to take a more measured response that does not jeopardise this aim, ING said. Either way, the market will likely need to price in a larger geopolitical risk premium until these tensions subside. #Oil Prices Increase Ahead of OPEC+ Meeting
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