Global oil prices are on the rise. As of 06:30 GMT, July futures for Brent crude oil increased by 68 cents, or 1.04%, to $66.06 per barrel. Meanwhile, July futures for West Texas Intermediate (WTI) rose by 70 cents, or 1.1%, to $62.73 per barrel.
This is reported by Finway
Reasons for the Increase in Oil Prices
The primary reason for the price hike is reports of Israel preparing to strike Iran’s nuclear facilities. This has raised concerns about potential disruptions in oil supplies from the “key production region of the Middle East.”
“Such escalation would threaten not only supplies from Iran but also from a significant portion of the entire region. … There are also concerns that Iran may retaliate by blocking the movement of oil tankers through the Strait of Hormuz in the Persian Gulf, through which Saudi Arabia, Kuwait, Iraq, and the United Arab Emirates export crude oil and fuel,” the report stated.
Current Situation in the Oil Market
At the same time, there are signs of increased oil supply in the market. Crude oil inventories in the U.S., the world’s largest consumer of the resource, rose by 2.5 million barrels as of the end of the work week on May 16. However, gasoline and distillate inventories decreased.
“Oil production in Kazakhstan also increased by 2% in May, despite pressure from OPEC+ to reduce output,” analysts reported.