Oil prices surged on Wednesday, with Brent crude futures rising 1.8% to settle at $65.85 per barrel, and U.S. crude futures climbing 1.9% to close at $62.47 per barrel. This marked the highest level since April 3rd, amid concerns that global oil supply might be under threat.
The U.S. government imposed new sanctions on Iranian oil exports on Wednesday, following the resumption of negotiations with Iran over its nuclear program earlier this month. This move intensified market worries about potential limitations on global supply, driving up oil prices.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) announced that countries like Iraq and Kazakhstan plan to further cut oil production to compensate for overproduction issues, providing additional support to crude futures prices.
According to the U.S. Energy Information Administration (EIA), for the week ending April 11, U.S. crude inventories increased by 515,000 barrels, reaching 442.9 million barrels, slightly above analysts' expectations of 507,000 barrels. However, gasoline and distillate inventories declined, further supporting oil prices.
The International Energy Agency (IEA) indicated this week that the growth in global oil demand is expected to hit its lowest level since 2020, reflecting signs of a global economic slowdown.
Remarks by Federal Reserve Chairman Powell stirred slight unease in the market as he noted that tariff hikes could lead to increased inflation and slower economic growth, causing crude futures to give back some of their gains after hitting a peak.
Moreover, continuing uncertainty over trade tensions has led several banks to lower their crude price forecasts, adding to market volatility.
