Oil futures edged higher on May 6th, 2024, amid renewed concerns about a potential disruption to supplies from the Middle East due to the ongoing Israel-Hamas conflict in Gaza. This rise comes despite a recent decline in oil prices caused by weak economic data and speculation Kglobal oil prices, rose 77 cents, or 0.9%, to settle at $83.73 per barrel.
- West Texas Intermediate (WTI) crude futures, a benchmark for U.S. oil prices, closed at $78.98 a barrel, up 87 cents, or 1.1%.
The price increase comes after a week in which both Brent and WTI futures contracts had their biggest weekly decline in three months. This decline was attributed to concerns about slowing global economic growth, fueled by weak U.S. jobs data, and speculation that the Federal Reserve might cut interest rates to stimulate the economy.
The rebound in oil prices on May 6th is likely a response to two key factors. First, the ongoing conflict in Gaza has raised concerns about a potential disruption to oil supplies from the region. The Middle East is a major oil-producing region, and any disruption to supplies from there could have a significant impact on global oil prices.
Second, the world's largest oil exporter, Saudi Arabia, raised the official selling prices (OSPs) for its crude sold to most regions in June. This move by Saudi Arabia suggests that the kingdom believes that demand for oil will be strong in the coming summer months, which typically see increased demand for gasoline due to summer travel.
It remains to be seen how the situation in Gaza will develop and how it will impact oil prices. However, the recent price increase highlights the sensitivity of oil prices to geopolitical tensions in the Middle East.
