Oil prices edge higher amid demand hopes, geopolitical tensions

June 24, 2024 06:26 PM PDT | By Investing

Oil prices edge higher amid demand hopes, geopolitical tensions

Markets bet on summer demand boom

Oil prices advanced in recent sessions, underpinned by expectations that demand will improve as travel picks up pace during the summer season.

This notion was furthered by recent data showing an unexpected draw in U.S. inventories, with gasoline stockpiles declining.

But just how much demand will improve in the coming months remained in doubt, especially as the U.S. economy grapples with high interest rates and sticky inflation. This notion boosted the dollar, which also limited gains in oil prices.

Focus this week is on key PCE price index data, which is the Federal Reserve’s preferred inflation gauge, for more cues on the world’s biggest fuel consumer.

Outside the U.S., deteriorating economic conditions in Europe pointed to dwindling demand in the region.

Doubts over an economic recovery in China also remained in play, as traders awaited more stimulus measures in the world’s biggest oil importer.

Israel-Hamas, Russia-Ukraine tensions remain in play

Persistent geopolitical disruptions in the Middle East and Russia also kept concerns over potential supply disruptions in play.

Israel kept up its pace of air strikes on Gaza, while also pushing further with its ground assault on Rafah. A ceasefire with Hamas appeared to be a distant prospect, while reports of a potential escalation in the conflict into an all-out war with Hezbollah also came into play.

In Russia, Ukraine said it had damaged more than 30 Russian oil refineries, as Kyiv continued to target Russia’s key oil producing infrastructure.

This article first appeared in Investing.com

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