Oil prices rise after Iran president’s death, brent crude at $84.24/bbl

By 0049 GMT, Brent crude had climbed 26 cents, or 0.3 per cent, to $84.24 per barrel, while U.S. West Texas Intermediate (WTI) crude had risen 15 cents, or 0.2 per cent, to $80.21 per barrel.

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Brent finished the previous week with a 1 per cent increase, marking its first weekly gain in three weeks. WTI had advanced by 2 per cent, bolstered by positive economic data from the U.S. and China, the world’s largest oil consumers.

What’s behind the rally of crude oil prices?

A helicopter carrying Iranian President Ebrahim Raisi crashed on Sunday, according to Iranian officials. The official stated that the lives of President Raisi and Foreign Minister Hossein Amirabdollahian were in jeopardy.

Despite the region’s volatility, oil prices experienced only a slight movement. The Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC, are set to meet on June 1.

“The oil market remains largely rangebound, and without any fresh catalyst, we will likely have to wait for clarity around OPEC output policy to break out of this range. The market also appears increasingly numb to developments on the geopolitical front, likely due to the large amount of spare capacity OPEC is sitting on,” Warren Patterson, head of commodities strategy at ING, was quoted as saying by Reuters.

Also read: Gold hits new record high on rising US Fed rate cut expectations, renewed Middle East concerns

Taking advantage of the recent decline in oil prices, the U.S. government announced late last week that it had purchased 3.3 million barrels of oil at $79.38 per barrel to help replenish its Strategic Petroleum Reserve following a significant sale from the stockpile in 2022.

Last week, market support came from signs of easing inflation in the U.S., which boosted expectations of interest rate cuts. Such cuts could lower the dollar’s value, making oil cheaper for those holding other currencies.

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Published: 20 May 2024, 09:56 PM IST