Oil prices rise amid uncertainty over Iranian president’s fate and Saudi king’s health

Oil prices rise amid uncertainty over Iranian president’s fate and Saudi king’s health
Oil prices rise amid uncertainty over Iranian president’s fate and Saudi king’s health

Oil prices rose on Monday, amid political uncertainty in major producing countries, after Iran’s president suffered a helicopter crash and the Saudi crown prince canceled a trip to Japan, citing health problems of the king.

Brent crude gained 32 cents, or 0.4%, to $84.30 a barrel at 0240 GMT, its highest level since May 10. U.S. West Texas Intermediate (WTI) crude rose 5 cents to $80.11 a barrel, after hitting $80.23 earlier, its highest level since May 1.

A helicopter carrying Iranian President Ebrahim Raisi crashed Sunday, Iranian officials said. Hopes that Mr. Raisi and Foreign Minister Hossein Amirabdollahian had survived the crash in mountainous terrain and freezing weather are fading, an Iranian official said Monday after search teams located the wreckage of the helicopter.

Separately, Saudi Arabia’s Crown Prince Mohammed bin Salman

postponed his visit

in Japan, which was scheduled to begin Monday, due to King Salman’s health problem, Japan’s Chief Cabinet Secretary Yoshimasa Hayashi said.

The Saudi state news agency reported on Sunday that King Salman, 88, had a health problem.

King Salman

will undergo treatment for inflammation of the lungs.

“If the father’s health is failing, it adds to the layer of uncertainty that is already surrounding energy markets this morning, following the news of the Iranian president’s passing,” said Tony Sycamore, an analyst at IG Markets.

He added that WTI prices could rebound further towards $83.50 after surpassing the 200-day moving average of $80.02.

“I think there are enough reasons for this to happen, especially if you take into account the Chinese real estate measures announced last week, including the relaxation of mortgage rules, the reduction of deposits and the purchase of unsold houses,” Mr. Sycamore said.

Brent ended the previous week up about 1%, its first weekly gain in three weeks, while WTI rose 2% on improving economic indicators from the United States and China, the largest consumers of oil in the world.

Despite the volatility in the region, oil prices have moved only slightly.

“The oil market remains largely range-bound and without a new catalyst, we will likely have to wait for clarity on OPEC+ production policy to move out of this range,” said Warren Patterson, head of commodities strategy at ING.

The Organization of the Petroleum Exporting Countries and its allies, called OPEC+, are due to meet on June 1.

“The market also appears increasingly unresponsive to developments on the geopolitical front, likely due to OPEC’s large reserve capacity,” Patterson said.

Saul Kavonic, energy analyst at MST Marquee, said the market and industry were already accustomed to Crown Prince Mohammed Bin Salman’s leadership in the energy sector.

“The continuity of the Saudi strategy is expected regardless of this health problem,” he added.

In the United States, Washington has taken advantage of the recent drop in oil prices, declaring late last week that it had purchased 3.3 million barrels of oil at $79.38 per barrel to help fill its strategic oil reserve. oil after a massive sell-off in the stock in 2022.

Last week, signs of slowing inflation in the United States supported the market by increasing expectations of interest rate cuts, which could lower the value of the dollar and make oil cheaper for holders of other currencies.

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