Oil prices increased on Monday, following a 2% rise in the previous session, due to production disruptions in major US crude-producing regions. The upward trend was driven by harsh weather conditions, which have resulted in the loss of approximately 250,000 barrels per day in the US. Brent crude futures rose 42 cents, or 0.7%, to $66.30 a barrel, while US West Texas Intermediate crude was at $61.49 a barrel, up 42 cents, or 0.7%.
Both benchmarks recorded weekly gains of 2.7% to close on Friday at their highest points since January 14. The increase in oil prices has been further fueled by geopolitical tensions, particularly between the US and Iran. The deployment of a US military aircraft carrier strike group and other assets to the Middle East has added to supply-disruption fears, contributing to a risk premium in crude prices.
Analysts note that traders are wary of the escalating tensions, which have been exacerbated by President Trump’s declaration of a US armada sailing toward Iran. According to IG market analyst Tony Sycamore, this has reignited supply-disruption fears, adding a risk premium to crude prices and supporting risk aversion flows.
In related news, Kazakhstan’s Caspian Pipeline Consortium has returned to full loading capacity at its terminal on the Black Sea coast after completing maintenance at one of its three mooring points. Meanwhile, Iran has warned that it would treat any attack as an all-out war, further heightening tensions in the region.
The recent increase in oil prices is a significant development, given the ongoing geopolitical tensions and production disruptions. As the situation continues to unfold, investors and traders will be closely monitoring the situation, taking into account the potential impact on global energy markets. With the US and Iran at odds, the risk of supply disruptions remains a major concern, and the oil market is likely to remain volatile in the coming days.
