Oil prices rose by nearly $2, reaching their highest level in over a month.

U.S. West Texas Intermediate crude futures gained $1.88, or 2.4%, to $80.33 per barrel, the highest level since late April.

Ignacio Teson•Monday, June 17, 2024•1 min read

Oil prices have also been boosted by the increase in geopolitical risk premium.

Oil prices rose nearly $2 per barrel on Monday, reaching their highest level in more than a month, adding to last week’s gains as investors became more optimistic about demand prospects.

U.S. West Texas Intermediate crude futures gained $1.88, or 2.4%, to $80.33 per barrel, the highest level since late April. Meanwhile, Brent crude rose $1.63, or 2%, to $84.25 per barrel, also the highest level since April.

Both benchmarks increased last week as reports from the OPEC+ group, the International Energy Agency, and the U.S. Energy Information Administration strengthened confidence that oil demand will improve in the second half of the year, reducing inventories.

USOIL

Also contributing to the price strength was the confirmation from OPEC+ that the plan to increase supplies starting from the fourth quarter of this year could be canceled or reversed depending on market conditions. The plan, announced after the June 2 meeting, had caused a sharp drop in prices.

The prospects of strong fuel demand in the upcoming quarter, assurances from Saudi Arabia that the October increase will be subject to prevailing conditions, and greater attention to quota breaks to reduce and align production seem to provide support.

Economic data from China also bolstered hopes for greater oil demand from the world’s top importer.

Manufacturing investment in China grew by 9.6% in the first five months of the year, according to government data released on Monday. However, other data were mixed, with industrial production falling short of expectations.

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ABOUT THE AUTHOR See More

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.