Oil markets have been in turmoil in recent days. Oil prices have soared to their highest level since April 2024. Markets are being impacted by the prospect of US rate cuts, continued conflict in the Middle East, and the risk of hurricane-related supply disruptions.
The barrel of North Sea Brent, the benchmark for Algerian oil, is sold at 87.31 dollars this Tuesday, July 2. As for its American equivalent, West Texas Intermediate (WTI), it is displayed at 84.11 dollars per barrel. This increase in oil prices is the result of several factors.
In fact, according to Claudio Galimberti, expert at Rystad Energy, ” the increasingly likely Fed interest rate cuts in the coming months and the still high geopolitical risk premium “, especially because of the war in the Middle East, are helping to push up prices.
Concerning American interest rates, they will have to fall due to the decline in inflation. A decline that will have to lead the American central bank (FED) to decide ” rate cuts of at least two-quarters of a percentage point this year, potentially starting in September », souligne Claudio Galimberti.
Oil in a good phase
The law of supply and demand also plays a big role in this price increase. OPEC crude exports fall ” in June compared to the previous month, ” just as refineries are ramping up in anticipation of the summer peak, is helping to make the market tighter than expected, and prices are reacting accordingly “, the Rystad Energy analyst continues.
In addition to these factors, weather also plays its part in these fluctuations. Market participants are hedging against the possibility of refinery disruptions as hurricane season kicks off and Beryl ” is gaining in intensity, underlines analyst Tamas Varga, of PVM Energy. In addition, the good health of the Chinese economy is driving demand, and therefore prices, upwards. Indeed, the manufacturing sector in China, the world’s largest importer of oil, is clearly growing according to data published the day before.
