Oil Prices Rise Supported by Increased Risk Sentiment and Global Market Optimism: Oil prices maintain their strength with increasing risk sentiment in global markets.
Amid mixed forecasts, oil prices have risen this month, helping to reduce their quarterly losses.
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Oil Price Increase
Mixed Forecasts for Oil Markets
Price Differentials and Their Benefits
Oil Price Increase
Oil prices have seen their biggest increase in a week as broader market risk appetite overshadowed mixed crude forecasts.
Brent crude traded above $84 a barrel after rising 2% on Monday,
while West Texas Intermediate (WTI) crude rose near $80.
Stock markets are experiencing significant gains, with the S&P 500 index achieving its thirtieth record high this year,
despite the Federal Reserve lowering its expectations for interest rate cuts. The optimistic outlook in broader markets helps support oil prices.
Mixed Forecasts for Oil Markets
Despite mixed forecasts, oil prices have risen this month,
reducing their quarterly losses after the OPEC+ alliance agreed to extend production cuts.
Any subsequent decision to pump more oil into the market depends on market conditions.
Demand in Asia appeared relatively weak, with signs of declining gasoline consumption in India and sluggish refining activity in China
. Additionally, data from China on Monday showed that industrial activity is expanding slower than expected.
Price Differentials and Their Benefits
Nevertheless, the price differentials between the nearest two Brent contracts indicate underlying strength in the short term.
In a “backwardation” scenario, the differential reached 75 cents a barrel,
indicating rising prices, which is double the differential seen about a week ago.
In summary, despite challenges and mixed forecasts, oil prices continue to rise,
supported by increased risk sentiment and broader market optimism.
Oil Prices Rise Supported by Increased Risk Sentiment and Global Market Optimism