Oil Prices Edge Up After Recent Decline, Influenced by Market Sentiment

Oil prices saw a slight uptick, supported by a stronger market sentiment across various global sectors. Brent crude traded above $85 per barrel, recovering from losses seen in the previous trading session. The global stock market showed gains as investors eyed upcoming political events and awaited inflation data. Meanwhile, a weakening US dollar increased the attractiveness of commodities priced in the currency.

Despite recent volatility, crude oil remains on track for a monthly gain. The US is experiencing rising demand for gasoline, coupled with robust air travel volumes, which is bolstering market optimism. Additionally, the prompt spread for Brent has strengthened this month, indicating a bullish backwardation structure that suggests tightening supply conditions.

Warren Patterson, Head of Commodities Strategy at ING Groep NV in Singapore, expressed optimism about the oil market outlook. "We anticipate a tightening balance in the third quarter, supported by positive speculative sentiment as we enter the summer season," he noted.

In Iran, snap elections are scheduled for Friday following the tragic death of Ebrahim Raisi in a helicopter crash last month. This election occurs amidst heightened geopolitical tensions, with Tehran activating proxy militias in the region, notably targeting Israel.

This development underscores the complex interplay of geopolitical events and economic factors influencing global oil markets.

Also Read: Oil Prices Slip as US Crude and Gasoline Stocks Surge