The prices of oil in the international market stabilized on Monday as new geopolitical risks in Russia and the Middle East came into sharp focus following a series of weekend attacks.
Brent crude futures hovered around $84 per barrel, while West Texas Intermediate (WTI) remained above $80. This price stabilization occurred after Ukraine intensified its drone attacks on Russian refineries over the weekend, targeting key infrastructure on Sunday.
Also, a China-bound oil tanker was struck by a missile launched by Houthi rebels in the Red Sea on Saturday, further escalating tensions in the region, according to Bloomberg. This missile attack on a China-bound oil tanker in the Red Sea by Houthi rebels shows the persistent volatility in the Middle East, which remains a crucial artery for global oil transportation.
Below is Warren Patterson view “The market has become increasingly numb to geopolitical developments, and the large amount of spare OPEC production is likely contributing to this. We may have to wait for further clarity from OPEC+ on its output policy to break out of the range.”
Warren Peterson is the head of commodities strategy for ING Group NV in Singapore
Globally the benchmark of Brent crude is approximately 9% higher this year, this is due to supply cuts implemented by the Organization of Petroleum Exporting Countries (OPEC)+ coalition. However, prices have softened since mid-April as earlier geopolitical tensions eased.
Furthermore, there has been a noticeable pullback in bets on rising gasoline prices ahead of the U.S. summer driving season, indicating a tempered outlook for demand.
