The price of crude oil has increased in the international market due to geopolitical tensions in the Middle East, which may disrupt oil production. Despite this, there are still concerns among traders about the declining demand for oil. According to Reuters, the price of Brent crude rose by $1.01, or 1.4%, reaching $77.58 per barrel. Similarly, West Texas Intermediate (WTI) increased by $1.05, or 1.4%, to $74.25 per barrel.
The crude oil market had been trending downwards for several days. On Monday, the price of Brent crude for future delivery hit its lowest since January, and WTI reached its lowest since February, largely due to concerns about the U.S. economic situation affecting the global stock market.
Following the assassination of top Hamas and Hezbollah leaders last week, there are fears that the Gaza conflict could escalate into a larger Middle Eastern war. ANZ analyst Daniel Hynes mentioned that increasing conflict in the Middle East could risk supply disruptions from the region.
In April, the price of crude oil had peaked at $92 per barrel but later fell below $81 due to reduced demand. To control prices, OPEC+ has been reducing oil production for a long time and recently decided to continue this policy. However, the organization plans to gradually ease production cuts from October. OPEC+ currently reduces oil production by 5.86 million barrels per day, about 5.7% of global demand. The organization also indicated that the policy might be suspended or further reduced depending on market conditions.
In a statement after a recent meeting, OPEC+ mentioned that member countries could reduce production by 2.2 million barrels per day until September, though it is not mandatory. The organization may slowly withdraw from the production cut policy from October or decide to further reduce production based on the market situation.
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