On April 2nd, 2024, the price of oil climbed above $88 a barrel, a peak not seen since the previous October’s high of $90.
This surge reflects a growing oil demand, primarily fueled by China’s increased industrial activities.
Reports from S&P Global on April 1st highlighted that China’s manufacturing sector is booming. Its PMI hit 51.1 in March, the highest in over a year.
The supply side is just as influential in this scenario. OPEC has been holding back 2.2 million barrels daily since January, tightening the market.
They plan to meet again on April 3rd, possibly to continue this strategy.
Moreover, tensions in the Middle East, especially the conflict between Israel and Hamas, are causing worries.
These geopolitical issues threaten a stable oil supply, contributing to the price hike. Since the beginning of the year, oil prices have increased 16.8%.
This situation illustrates a delicate balance between supply and demand, affected by global events and policies.
As industrial demands rise and geopolitical events unfold, the oil market remains at the mercy of these interconnected factors.
Background
Mizuho analysts highlighted Middle East tensions, noting a recent Israeli attack in Damascus. This incident might escalate conflicts, potentially disrupting the oil supply.
However, Spartan Capital’s Peter Cardillo believes the upcoming OPEC+ gathering won’t impact oil prices significantly.
In addition, the consensus is that the alliance will stick to its current production cuts.
Louis Navellier of Navellier & Associates noted that the US energy demand is on the rise with spring’s arrival.
Yet, with ongoing supply constraints, oil prices are expected to maintain their upward trajectory.
This dynamic scenario underscores the global oil market’s sensitivity to geopolitical events, industrial performance, and seasonal changes.
As the world watches OPEC+’s decisions and navigates supply-demand shifts, oil prices continue to unfold.