June 13, 2024
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OIL & GAS RENEWABLE ENERGY

Brent Oil Gains Amidst Political Uncertainty In Major Producing Countries

Brent crude futures extended gains on Monday, in the midst of political uncertainty in major oil producing countries after Iran’s president died in a helicopter crash and the Saudi crown prince cancelled a Japan trip, citing health issues with the king.

Brent gained 10 cents, or 0.1%, to $84.08 a barrel by 0454 GMT, after rising to $84.30 earlier, its highest since May 10.

U.S. West Texas Intermediate (WTI) crude for June edged down 5 cents to $80.01 a barrel, after hitting $80.23 earlier, the highest since May 1. The June contract expires on Tuesday and the more-active July contract was at $83.75, up 12 cents, or 0.1%.

Yesterday, Iranian President Ebrahim Raisi and his foreign minister were killed in a helicopter crash in mountainous terrain and icy weather, an Iranian official said after search teams located the wreckage in East Azerbaijan province.

Also, Saudi Arabian Crown Prince Mohammed bin Salman postponed his visit to Japan, scheduled to begin on Monday, because of a health issue with King Salman, said Japan’s Chief Cabinet Secretary Yoshimasa Hayashi. The 88-year-old King Salman will undergo treatment for lung inflammation, as reported by Saudi Arabia’s state news agency on Sunday.

“If the father’s health is failing, it adds to the layer of uncertainty already circling energy markets this morning following the news that the Iranian President is missing,” IG Markets analyst Tony Sycamore said.

He added that WTI prices may rebound further toward $83.50 after rising above the 200-day moving average of $80.02.

“I do think there are enough reasons out there for this to happen, more so when you factor in China property measures announced last week, including relaxing mortgage rules, lowering deposits, and buying unsold homes,” Sycamore said, as gathered by Reuters.

“The market also appears increasingly numb to developments on the geopolitical front, likely due to the large amount of spare capacity OPEC is sitting on,” Patterson said.

Saul Kavonic, an energy analyst at MST Marquee, said the market and industry are already accustomed to Crown Prince Mohammed Bin Salman’s leadership in the energy sector.

“Continuity in Saudi strategy is expected regardless of this health issue,” he added

 

 

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