AA / Ankara / Duygu Alhan
Oil prices rose in morning trading on Wednesday, driven by a positive demand outlook in the United States, the world’s largest oil consumer, and escalating tensions in the Middle East, which pose a threat to global oil routes. On the other hand, uncertainties regarding the timetable for rate reductions by the American Federal Reserve (Fed) still limited the rise in barrel prices.
International benchmark Brent crude traded at $84.62 per barrel at 10:25 a.m. local time (0725 GMT), up 0.47% from Tuesday’s closing price which had concluded trading at $84.22 per barrel.
The American benchmark barrel West Texas Intermediate (WTI), for its part, traded at 81.28 dollars per barrel, with an increase of 0.55% compared to yesterday’s closing price which concluded the day at 80.83 dollars per barrel.
Markets expect U.S. crude oil reserves to decline by 2.6 million barrels. The Energy Information Administration (EIA) in the United States is expected to release official figures on the state of reserves later today on Wednesday.
Barrel prices are expected to rise further if official EIA data reveals a decline in oil reserves.
From another perspective, ongoing uncertainties over the timing of the Fed’s interest rate cuts continue to weigh on crude prices.
Analysts noted that Fed officials are eager for more evidence of slowing inflation and are awaiting the release of growth data due Thursday, as well as personal consumption spending data due Friday, to glean clues about the Fed’s roadmap for the period ahead.
Fed board member Michelle Bowman said Tuesday that cutting the Fed’s policy rate prematurely or too quickly could lead to a rebound in inflation, requiring further increases in the rate. key rate in the future to bring inflation back to the 2% target set by the American central bank over the long term.
Escalating geopolitical tensions in the Middle East, home to most of the world’s oil reserves, also supported the price rally by fueling market participants’ concerns about the potential for disruption to global energy supply routes.
An Iraqi resistance group announced Wednesday morning that a combat drone had hit its target in Eilat, in southern Israel.
The group, however, did not reveal the nature of the target, but stressed that it would “continue to destroy enemy (Israeli) strongholds.”
* Translated from English by Mounir Bennour.
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