WASHINGTON (dpa-AFX) - Crude oil prices increased on Thursday as fresh tension brewing in the Middle East generated demand, while a drop in US inventories was seen as reflecting robust summer demand.
Today, WTI Crude Oil closed surged $1.16 to settle at $67.54 per barrel.
September month Brent Crude contract was last seen trading up by $0.80 to $69.32 per barrel.
Focused on signing favorable trade deals with US trading partners by pressuring them with tariffs, US President Donald Trump announced a spate of high tariffs over the past several days to major economic powers. Trump today optimistically stated that agreements with India and Europe are soon to happen.
Countries are sharpening their approach in getting a deal done soon, as the August 1 deadline for 'reciprocal tariff' suspension period is closing in.
As markets breathed a sigh of relief after the Israel-Iran conflict ended on June 24, last week's Red Sea attacks on two bulk carriers by Yemen's Houthi rebel group has led to new, simmering tensions in the Middle East. As of now, the US and the West have refrained from any drastic counterattacks and hence the situation by and large remains calm.
A drone attack on Kurdistan targeted a Norwegian-operated oil and gas firm in the Tawke, Zakho administration area of northern Iraq, leading to a suspension of production. The initial reports point to the drone coming from regions under control by Iran-backed militia.
Last week, the International Energy Agency (IEA) stated that output increases were not leading to higher inventories which reflected high demand for oil due to peak summer consumption season.
China's June crude throughput also increased 8.5% year-on-year.
Saudi Arabia's second quarter production surged to 9.8 million barrels per day - a 700,000 bpd increase from May to June.
Yesterday, the US Energy Information Administration (EIA) reported that crude oil inventories in the US decreased by 3.9 million barrels during the week ending July 11. Commercial stockpiles at 422.2 million barrels are about 8% below the five-year average for this time of the year.
High tariffs could slowdown the economy and thereby hurt oil and energy demand, resulting in a decline in oil prices.
Analysts are of the opinion that oil prices may remain volatile at least in the near term until the final scale of tariffs and their impact on the global economy is felt and absorbed by the markets.
Moreover, if the Houthis continue with their strikes leading to US intervention, the Middle East could get hit with an escalating supply-and-transit disruption for oil and energy trade for a prolonged period of time. This could lead to gains in oil prices.
Copyright(c) 2025 RTTNews.com. All Rights Reserved
Copyright RTT News/dpa-AFX
© 2025 AFX News
