Oil inches upward following report surrounding the death of Iran’s president
Oil prices saw a slight increase on Monday following report surrounding the death of Iran’s President Ebrahim Raisi, his foreign minister and others in a helicopter crash. The development is seen to have contributed to the overall market sentiment, which also included last week’s gains.
Brent oil futures for July saw a 0.3 percent rise, reaching $84.19 a barrel, while West Texas Intermediate (WTI) crude futures experienced a 0.2 percent increase, trading at $79.70 a barrel.
In a tragic turn of events, a helicopter carrying Iranian President Ebrahim Raisi and Foreign Minister Hossein Amirabdollahian crashed over the weekend in the mountainous terrain of northwestern Iran, with both leaders report dead. The loss of President Raisi comes at a time of heightened tensions between Iran and Israel, following a series of strikes exchanged earlier this year.
Prior to the report, crude oil prices had been experiencing an upward trend due to several key factors. Positive indicators such as the possibility of U.S. interest rate cuts and improving demand in China have contributed to this increase in appetite for crude.
Furthermore, the U.S. government’s announcement of its purchase of approximately 3.3 million barrels of oil to refill the strategic petroleum reserve has also bolstered market confidence. However, ongoing instability in the Middle East and its potential impact on oil supplies remains a significant concern, keeping Brent oil prices above the $80 mark for most of 2024.
As the week unfolds, oil markets are exercising caution in anticipation of crucial announcements regarding U.S. interest rates and the economy. The release of the Federal Reserve’s late-April minutes and speeches from several Fed officials would also be closely scrutinised for insights into potential policy shifts.
Additionally, the upcoming Organization of Petroleum Exporting Countries and allies (OPEC+) meeting on June 1st is expected to provide updates on the cartel’s plans to maintain ongoing production cuts, which could have a significant impact on global oil supplies.
