Graphic charts Brent Crude Futures since 2022. Source: Graphic News
Oil prices have surged in recent days, threatening to push Brent Crude, the global oil benchmark, to $100 (R1860) a barrel for the first time in almost two years.
Traders have been taken by surprise by a surge in oil prices, which threaten to push Brent crude, the global oil benchmark, to $100 a barrel for the first time in almost two years.
Mere days ago, oil jumped above $90 a barrel, triggered by military tensions between Israel and Iran.
Reuters reported that global oil benchmark Brent steadied above $91 a barrel yesterday reducing early losses. This was prompted by Israel withdrawing more soldiers from Gaza and committing to fresh talks on a potential ceasefire in the Middle East conflict.
Brent crude futures were down 16 cents, or 0.2%, at $91.01 a barrel by 3.35pm. US West Texas Intermediate crude was down 9 cents, or about 0.1%, at $86.82. Both benchmarks lost more than $2 earlier in the session.
Oil prices gained about 4% last week on escalating geopolitical tensions.
Other factors are also at play:
– Mexico has slashed its crude exports by 35% to try and wean the country off costly fuel imports, compounding a global squeeze and prompting the US to consume more domestic oil;
– US sanctions are stranding Russian oil cargoes at sea, with supplies from Venezuela a potential next target;
– Yemeni Houthi rebel attacks on tankers in the Red Sea are delaying crude oil shipments through the Suez Canal;
– OPEC and its allies continue to cut production.
Reuters said a US employment report on Friday suggested the economy ended the first quarter on solid ground, which could prompt the Federal Reserve to delay interest rate cuts this year.
Investors would be scouring consumer price index data from the US and China this week for further clues on the timing of possible Fed rate cuts and to gauge the economic health of the world's top two oil consumers.
GRAPHIC NEWS