Oil Prices Rise 1% Amid Strong Demand Signals and Russia-Ukraine Peace Uncertainty: What This Means for Investors and Businesses
LONDON – Oil prices rose by 1% on Thursday, supported by strong demand indicators in the United States and ongoing uncertainty surrounding efforts to end the conflict in Ukraine.
Brent crude futures approached a two-week high, increasing by 64 cents, or about 1%, to reach $67.48 per barrel at 10:12 GMT. Meanwhile, US West Texas Intermediate (WTI) crude futures rose by 65 cents, also around 1%, settling at $63.36 per barrel.
On Wednesday, Russia declared that attempts to address security concerns related to Ukraine without Moscow’s involvement are a “road to nowhere.”
Independent analyst Gaurav Sharma noted, “If the White House’s efforts succeed in halting hostilities in Ukraine and Russia gradually rejoins the international community, it will put downward pressure on crude prices. For now, however, Brent’s support level remains at $65 per barrel.”
In related developments, US President Donald Trump announced an additional 25% tariff on Indian goods starting August 27, in response to India’s significant purchases of Russian crude—which constitute nearly 35% of India’s total oil imports. Russian embassy officials in New Delhi reaffirmed on Wednesday that Moscow expects to continue supplying oil to India despite US warnings.
Due to ongoing uncertainty about progress toward resolving the Ukraine conflict and the potential for tighter sanctions on Russia, bullish sentiment has returned among traders, according to Tamas Varga, an analyst at PVM Oil Associates.
Additionally, US crude inventories declined by 6 million barrels last week, falling to 420.7 million barrels as reported by the US Energy Information Administration on Wednesday. This decline exceeded expectations of a 1.8 million-barrel draw reported in a Reuters poll. While the significant inventory drop suggests rising demand, Panmure Liberum’s Ashley Kelty pointed out that increased crude stockpiles at Cushing, Oklahoma, indicate that underlying demand may be weaker, with the larger drawdown driven partially by higher refinery activity and increased exports.
— Reuters
Special Analysis by Omanet | Navigate Oman’s Market
The recent rise in oil prices, driven by strong US demand and ongoing geopolitical tensions, signals a continued robust market for Oman’s energy sector, offering opportunities for increased revenue and investment. However, uncertainty around the Ukraine conflict and potential sanctions on Russia introduce volatility, necessitating cautious strategic planning. Smart investors and entrepreneurs should monitor global political developments closely and consider diversifying to hedge against potential disruptions in supply chains and price fluctuations.
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