May 20 2024: Oil prices edged higher in Asian trading on Monday as markets awaited further information regarding the rescue attempts for Iran’s President Ebrahim Raisi following a helicopter crash.
Market Influences and Sentiment:
Crude prices maintained gains from the previous week, buoyed by prospects of U.S. interest rate cuts and improving demand from China, a major oil importer.
Positive sentiment was further supported by the U.S. government’s purchase of about 3.3 million barrels of oil to help refill the Strategic Petroleum Reserve.
Brent oil futures for July delivery rose 0.3% to $84.19 per barrel, while West Texas Intermediate (WTI) crude futures increased by 0.2% to $79.70 per barrel by 22:08 ET (02:08 GMT).
Iran’s Political Stability in Focus:
Reports indicated that a helicopter carrying Iranian President Ebrahim Raisi and his foreign minister crashed in mountainous terrain due to bad weather over the weekend.
Rescue efforts are underway, with some Iranian officials expressing concerns about Raisi’s life being at risk.
Raisi, a potential candidate for Iran’s next supreme leader, holds a significant political position in the oil-producing nation.
The crash comes amidst heightened tensions in the Middle East, including recent strikes between Israel and Iran, and ongoing Israeli offensives against Gaza.
Middle East Tensions and Oil Supply Concerns:
Fears of continued instability in the Middle East potentially disrupting oil supplies have supported oil prices, keeping Brent above $80 per barrel for most of 2024.
Upcoming Economic Cues and OPEC+ Meeting:
The oil market remains cautious ahead of key economic cues from the U.S., including the minutes of the Federal Reserve’s late-April meeting and addresses from several Fed officials.
Additionally, the market is anticipating the upcoming OPEC+ meeting on June 1, where updates on the cartel’s production cut plans will be closely monitored.
