Today, crude oil prices maintained their recent gains, reaching nearly a two-month high on optimism fueled by concerns over heightened tensions in the Middle East and strong anticipated demand in the U.S.
Brent crude hovered above $86, edging closer to $87 per barrel, while West Texas Intermediate stood above $83 per barrel as of the latest update. The prices surged 2.5% on Monday, driven by expectations of increased demand during the summer driving season.
Oil analyst Vandana Hari of Vanda Insights suggested to Reuters that the price hike seems driven more by fear and sentiment rather than changes in supply and demand fundamentals.
In addition to market sentiments, Hurricane Beryl, which reached Category 5 status over the Atlantic, contributed to the upward pressure on oil prices. The hurricane has weakened since making landfall in the Caribbean earlier this week and is forecasted to further lose strength, eventually hitting land as a Category 1 storm, according to reports from Bloomberg and the AP.
“The breakout from the recent trading range to a new higher level reinforces the short-term upward trend,” remarked IG Asia analyst Yeap Jun Rong to Bloomberg.
Further bolstering oil prices, the American Automobile Association predicted a 5.2% increase in holiday travel over the upcoming July 4 weekend compared to last year, with car travel expected to rise by 4.8%. This forecast suggests robust oil demand, potentially easing concerns over demand strength in the U.S., particularly following recent inflation data indicating stability in May. Such stability is generally seen as supportive for oil prices.