Brent crude oil was sold at $103.30 per barrel and is on the verge of recording a 14% monthly increase. This price rise is due to recent developments in the Middle East and concerns about oil supply.
Increase in Brent Oil and WTI Prices
The price of Brent crude oil for delivery in November increased by 71 cents, or 0.69%, to $103.30 at 4:08 AM GMT on Wednesday. Additionally, active Brent oil contracts for December delivery rose by 35 cents to $96.51 per barrel. U.S. WTI crude oil also increased by 43 cents, or 0.48%, to $89.81 per barrel.
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Impact of Middle Eastern Developments on Prices
Brent oil is on track to record its largest monthly increase since July. U.S. crude oil, after surpassing the $106 mark in recent days, is on a 4% growth path for the first time since May. The price difference between the two oil benchmarks has reached its highest level in the past four months. This is due to developments related to the U.S. plan to limit diesel exports, which could lead to an oversupply in the market and a reduction in crude oil processing by refineries.
Donald Trump, the President of the United States, is considering the possibility of selling red diesel instead of banning the export of this product to alleviate price pressures on consumers ahead of the midterm elections in November.
Sugandha Sachdeva, founder of SS Wealth Street Research, emphasized that the ongoing uncertainty in the Middle East has kept geopolitical risk factored into prices. She added, “An improvement in supply could prevent further price increases, but a disruption in supply or heightened tensions could lead to a new wave of price hikes.”
Crude Oil and Gasoline Inventories in the U.S.
Meanwhile, market sources reported on Tuesday, citing data from the American Petroleum Institute, that crude oil and gasoline inventories in the United States increased last week, while distillate inventories decreased.
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