Crude Oil prices surged in early Asian trading on Thursday due to concerns over reduced supply as major producers maintain output cuts and signs of robust economic growth in the U.S., the world’s largest oil consumer.
Brent futures for June climbed 15 cents, settling at $89.51 a barrel at 0037 GMT. U.S. West Texas Intermediate (WTI) futures for May also rose 15 cents to $85.59 a barrel.
Both the June Brent contract and the May WTI contract have seen a four-day consecutive increase, reaching their highest levels since the end of October by the close of trading on Wednesday.
Oil prices have been bolstered by Ukraine’s attacks on Russian refineries, disrupting fuel supply, and concerns that the conflict between Israel and Hamas in Gaza could escalate to involve Iran, potentially disrupting supplies in the vital Middle East region.
During a meeting on Wednesday, top ministers from the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, maintained the current oil supply policy. They also urged some countries to enhance compliance with output cuts.
The group announced that some members would offset oversupply in the first quarter and revealed that Russia would focus on output rather than export curbs.
Federal Reserve Chair Jerome Powell’s cautious stance on future interest rate hikes, citing recent data showing higher-than-expected job growth and inflation, was viewed positively for oil. This suggests strong economic growth in the U.S., according to Rob Haworth, senior investment strategist for U.S. Bank’s asset management group.
In the Middle East, Iran has vowed retaliation against Israel following an attack on Monday that killed senior Iranian military personnel. Iran, the third-largest producer in OPEC, remains a significant factor in global oil markets.
