Crude oil prices started the trading day higher today after a correction in the closing of last week. The strengthening comes amidst concerns over tighter global supply due to escalating conflicts in the Middle East and Russia-Ukraine, while a decrease in the number of oil rigs in the US adds upward pressure on prices.
At the beginning of trading today, Monday (3/25/2024), WTI crude oil prices opened up by 0.09% at $81.15 per barrel, similarly, Brent crude oil prices moved higher, up by 0.5% at $85.90 per barrel.
The rise in oil prices coincides with the increasing geopolitical tension accompanied by attacks on energy facilities in Russia and Ukraine, as well as the impending ceasefire in the Middle East coming to an end.
"The escalation of geopolitical tension, coupled with the surge in attacks on energy facilities in Russia and Ukraine, along with the hope of a fading ceasefire in the Middle East, raises concerns about global oil supply," said Hiroyuki Kikukawa, president of NS Trading, a division of Nissan Securities.
"The decrease in the number of oil rigs in the US also increases concerns about tighter supply," he added.
Russia launched attacks on critical infrastructure in western Ukraine's Lviv region with missiles early Sunday, according to a statement from Ukraine, in a major airstrike that saw one Russian cruise missile briefly fly into Polish airspace.
Moscow launched 57 missiles and drones in the attack, which also targeted the capital Kyiv, two days after the largest aerial bombing of Ukraine's energy system in over two years of full-scale war, Kyiv revealed.
The move follows recent Ukrainian attacks on Russian oil infrastructure, with at least seven oil refineries targeted by drones just this month.
In the Middle East, Israeli forces surrounded two Gaza hospitals on Sunday, holding medical teams under heavy fire, said the Palestinian Red Crescent, a hospital provider organization. Israel said it had captured 480 Palestinian fighters in ongoing clashes at Gaza's main hospital, Al Shifa.
US Secretary of State Antony Blinken told Israeli Prime Minister Benjamin Netanyahu on Friday that Israel risked global isolation if it attacked the Palestinian city of Rafah in the Gaza Strip.
Meanwhile, the number of US oil rigs dropped by one to 509 last week, indicating lower future supply according to data from energy services company Baker Hughes.