Oil prices rose to a five-month high, boosted by heightened geopolitical risks in the Middle East and tighter supply in Mexico.
The Zhitong Finance App learned that oil prices rose to a five-month high, boosted by heightened geopolitical risks in the Middle East and tightening supply in Mexico. On Monday, Brent crude futures climbed to $88 a barrel after rising 0.5%, while WTI crude futures broke through $84 per barrel.
According to reports, Israel launched an air strike on Iran's embassy in Syria, causing the death of a senior military commander and others. Tehran said it would respond decisively. Petronas said it plans to stop exporting Mayan crude oil in the next few months.
Hedge funds are increasingly bullish on crude oil. According to ICE Futures Europe data, fund managers' net long positions on the global benchmark Brent crude oil reached a 13-month high. The contract's open positions have also returned to their highest level since the end of 2021.
Crude oil prices have risen 14% since this year as production cuts from OPEC and its allies offset increasing supply from other oil producers. According to reports, OPEC+ is expected to confirm its current output policy at a review meeting scheduled for Wednesday, which will result in a deficit by the end of this year.
Warren Patterson, head of commodity strategy at Dutch International Group, said: “While the tension in the Middle East is escalating, petroleum fundamentals are also strengthening. The market is tightening due to OPEC+ production cuts, which is evident from the strong momentum we have seen over the time span.”
On Monday, the market's focus on supply helped oil prices escape the impact of strong data on US manufacturing activity. Data shows that US manufacturing activity is strong, bond traders expect the Federal Reserve will not relax monetary policy this year, and the US dollar index has risen to a two-month high. Higher interest rates and a stronger dollar are generally bad for commodities.