(MENAFN) Crude oil prices trended higher on Thursday due to a combination of factors including strong US demand indicators and OPEC supply constraints amid geopolitical tensions in the Middle East.
Brent crude, the global benchmark, was trading at $85.58 a barrel as of 10:41 a.m. local time (7:21 a.m. GMT), up 0.59 percent from $85.08 a barrel the previous day. Similarly, West Texas Intermediate (WTI), the U.S. benchmark, rose 0.54 percent to $82.54 a barrel from $82.10 a barrel the previous day.
Adding to the bullish mood was a report from the U.S. Energy Information Administration (EIA) showing that U.S. commercial crude oil inventories fell sharply by 3.4 million barrels, much larger than the market had expected a small increase, while gasoline inventories fell by about 2 million barrels to 229.7 million barrels, signaling strong demand in the world’s largest oil consumer.
OPEC’s latest monthly report also contributed to market optimism, showing that its crude oil production fell by 80,000 barrels per day in June, bringing total production to 26.57 million barrels. The broader OPEC+ alliance, which includes non-OPEC producers, saw total production fall by 125,000 barrels to 40.8 million barrels. These production cuts highlighted concerns that supply levels are tightening, further supporting the rise in oil prices.
Meanwhile, geopolitical tensions in the Middle East continued to weigh on market sentiment. Despite ceasefire talks in Gaza, reports that Yemen’s Houthi rebels are targeting shipping in the Arabian Sea and the Gulf of Aden, including U.S. and Israeli vessels, have intensified concerns over potential disruptions to crude oil shipments. This geopolitical backdrop has heightened market uncertainty, leading to further upward pressure on crude oil prices.
Overall, a combination of strong demand signals from the US, supply constraints from OPEC and geopolitical uncertainties in the Middle East collectively influenced the bullish trend observed in the oil market on Thursday.
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