Brent gains amid US intervention buzz
The front-month ICE Brent contract has gained by $1.53/bbl on the day, to trade at $76.93/bbl at 09.00 GMT.
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Upward pressure:
Brent crude’s price has moved higher as hostilities between Israel and Iran have intensified, with both sides continuing to exchange fire.
Overnight, Israel struck two key Iranian nuclear sites, while Iranian drones hit a hospital in southern Israel, Reuters reports. Oil market participants are on high alert amid heightened speculations that Washington could intervene in the war.
“The market is being held in suspense over US President Donald Trump’s next move on the Israel-Iran conflict, more specifically whether he would authorise a direct US attack on the Islamic Republic,” Vanda Insights’ founder and analyst Vandana Hari notes.
On the demand side, oil got a boost after the US Energy Information Administration (EIA) reported a massive 11.5 million-bbl draw of commercial US crude oil inventories for the week ending 13 June.
Following the EIA report, ANZ Bank’s senior commodity strategist Daniel Hynes remarked that global oil demand “looks robust.” A decline in US crude stockpiles generally signals stronger demand and can support Brent.
Downward pressure:
Brent has had some downward pressure from a steady rise in OPEC+ production in recent months.
According to the group’s latest oil market report, total crude output from OPEC+ members averaged 41.23 million b/d in May, an increase of 180,000 b/d from April.
Saudi Arabia, the group’s de facto leader, boosted production by 177,000 b/d to reach 9.18 million b/d in May.
Eight members of the group will collectively raise their output by another 411,000 b/d in July, marking the fourth consecutive month of consistent supply increases.
By Aparupa Mazumder
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