WASHINGTON (dpa-AFX) - Crude oil rose sharply on Friday after yesterday's sell-off, buoyed by strong seasonal demand and lingering geopolitical risk in the Middle East.
WTI Crude Oil for August delivery closed up by $1.88 today to settle at $68.45 per barrel.
September month Brent Crude oil contract was last seen trading up by $1.66 today to $70.30 per barrel.
The International Energy Agency, in its Oil Market Report for July, revised its 2025 oil supply forecast up to 2.1 million barrels per day, up by 300,000 bpd from last month's projection of 1.8 million bpd growth.
It also added that oil demand is expected to rise by just 700,000 bpd (less than 1 million).
Despite strong summer demand, oversupply risk is looming for the later part of this year. This follows the decision by the OPEC+ cartel at last weekend's meeting to hike production for August at 548,000 bpd contrary to expected 411,000 bpd.
However, yesterday's Bloomberg report that OPEC+ is discussing a suspension in its oil production growth from October stoked fears of diminishing global demand.
After sending letters indicating new tariffs to 20-plus countries, US President Donald Trump has pushed the pedal harder on the BRICS alliance nations, then Brazil in particular, followed by India, and later this week, Canada.
Traders fear that high tariffs can lead to inflation and as a result weaken oil demand.
Last Sunday, Yemen's Houthi rebels (with Iranian militia backing) attacked and sank a bulk carrier vessel in the Red Sea, Magic Seas.
On Monday, again they sunk a big vessel, Eternity C.
The Israel-Iran conflict calmed down with the announcement of a ceasefire by Trump on June 24. The Middle East was free of any military threats so far.
However, analysts feel that if the US and the West indulge directly to retaliate these fresh Houthi attacks, a prolonged escalation may be unavoidable.
Such a scenario could cause supply-and-transit disruption to oil and energy trade, sending oil prices higher.
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