Oil prices rose today, Monday, amid traders’ assessment of support from expected demand in the summer and geopolitical tensions, especially with the continued Israeli aggression on the Gaza Strip and the Russian-Ukrainian war, which dissipated the impact of the dollar’s rise earlier today. For its part, gold prices rose today with the decline in yields on US Treasury bonds.
Brent crude futures rose 25 cents, or 0.3%, to $85.49 per barrel, at the time of writing, and US West Texas Intermediate crude futures increased 35 cents, or 0.42%, to $81.07 per barrel.
The two crude oil prices rose by about 3% last week, and achieved their second consecutive weekly gain.
“The main reason behind the rise in prices is the growing confidence that global oil inventories will inevitably decline during the summer in the Northern Hemisphere,” said Tamas Varga of oil brokerage BVM, referring to the summer demand for oil products.
The geopolitical risks in the oil-rich Middle East region – to Russian refineries and oil prices – are supported by the continued Israeli aggression on Gaza and the escalation of Ukrainian drone attacks.
Today, European Union member states agreed to impose a new package of sanctions on Russia due to the war in Ukraine, which includes a ban on reloading Russian liquefied natural gas into the bloc for shipment to third countries.
However, the rise of the dollar raises the cost of purchasing oil with the US currency for holders of other currencies.
gold
In another context, gold prices rose today with the decline in yields on US Treasury bonds, while investors await economic data and statements from US Federal Reserve (central bank) officials during the week to gauge the path of US interest rates.
Gold prices in spot transactions increased 0.33% to $2,329.10 per ounce, and US gold futures contracts also rose 0.4% to $2,340 per ounce.
The yield on 10-year US Treasury bonds decreased, which increases the attractiveness of gold, which does not yield a return.
Traders are awaiting the US Personal Consumption Expenditures Price Index report, which is the US Federal Reserve’s preferred measure of inflation, scheduled to be released on Friday, seeking indications about the interest path.
Investors are also awaiting statements from US Central Bank officials this week.
The dollar index – which measures the strength of the US currency against 6 major currencies – declined by 0.32% to 105.46 points, at the time of writing the report.
