The 1is In July, oil prices were moving in positive territory, driven by the escalation of tensions in the Middle East and prospects of more robust Chinese demand, but also by the rise of the euro against the dollar after the first round of legislative elections in France.
At around 10:15 GMT (12:15 in Paris), the price of a barrel of North Sea Brent crude for delivery in September, which is the first day of use as a reference contract, was gaining 0.28% to $85.24.
Its American equivalent, the barrel of West Texas Intermediate (WTI), for delivery in August, rose by 0.25% to 81.74 dollars.
Oil is “driven by escalating tensions between Israel and Hezbollah and a strong Chinese manufacturing PMI,” DNB analysts summarized.
War, growth and cyclones
Nearly nine months into the war, which began with an unprecedented Hamas attack on Israel on October 7, Israel struck on October 1is July the southern Gaza Strip after Palestinian fighters fired 20 rockets into its territory.
This war also raises fears of a conflict between Israel and the Lebanese Hezbollah after a multiplication of attacks on both sides of the Israeli-Lebanese border.
Manufacturing activity in China, the world’s largest oil importer, saw its strongest growth in three years in June. according to an independent index published on 1is July.
“In addition, Hurricane Beryl (Category 4), described by forecasters as “extremely dangerous”, is expected to cause enormous damage.” in the Caribbean, and although it should spare oil and gas operations in the Gulf of Mexico, “he recalls that forecasters expect an active hurricane season,” according to DNB.
Euro stronger than dollar
Moreover, “The markets are breathing a little sigh of relief” after the results of the first round of legislative elections in France, which boosts the euro and reciprocally weighs on the dollar, a phenomenon likely to fuel oil purchases, indicates John Evans, analyst at PVM Energy.
When the dollar falls, it actually pushes down the cost of oil, which is traded in the US currency, which tends to push up the price of a barrel.
Markets believe that the results of the first round of the French legislative elections reduce the probability that the National Rally will obtain an absolute majority in the National Assembly, which is seen as the “least bad scenario”, comment John Plassard, specialist for Mirabaud. As a reminder, the party came out on top in the votes with more than 33 % of the vote, slightly below the latest polls. The New Popular Front reached nearly 28% and the presidential camp 20%.
The editorial staff (with AFP)
