Oil Prices Up as Demand, Supply Imbalance Influence Energy Cost
Oil prices rose in the global commodities market because of an imbalance in demand and supply, affected by geopolitical risks. Mixed messages regarding supply are still impacting energy markets.
The international benchmark Brent crude was trading at $70.48 per barrel on Monday, marking a rise of around 0.17% compared to Friday’s closing price of $70.36. Similarly, the American benchmark West Texas Intermediate (WTI) traded at $68.59 per barrel, up approximately 0.2% from last Friday’s close of $68.45.
Last week, markets closely monitored developments impacting the global supply-demand balance, including updates from oil-producing nations and key geopolitical hotspots. OPEC and its allies, known as OPEC+, announced a larger-than-expected production increase for August, weighing on prices.
However, a report from the International Energy Agency pointing to tighter-than-expected supply, along with signs of new US sanctions on Russia, provided upward pressure on oil prices.
Additionally, remarks by US President Donald Trump regarding tariffs on the European Union and Mexico raised concerns about a possible resurgence in global trade tensions.
Expectations that the US Federal Reserve might ease monetary policy also supported oil prices. Low interest rates are expected to weaken the US dollar, which could boost oil demand and push prices higher.
On Friday, oil prices edged higher after Trump announced he would make a major statement on Russia next week, raising the prospect of new sanctions against a key oil producer. Comments from Fed officials further supported sentiment, as some signaled openness to rate cuts as early as this month.
Despite these gains, investors remained cautious over Trump’s tariff plans, including proposed blanket tariffs of up to 20% on most trading partners and a 35% tariff on Canadian goods starting August 1.
Analysts warn that rising tariffs could undermine global economic growth, dampen industrial activity, and curb oil demand.
Overall, oil prices managed to post a weekly increase, driven by a combination of geopolitical risk, positive US demand data, and a softer dollar, even as concerns about oversupply and trade tensions capped stronger gains. Nigeria’s Top 10 Insurance Companies Worth Climbs to N571bn
