Oil Price Today: Oil prices experienced a notable rebound on Tuesday, climbing after a significant drop of 6% in the previous session. This upward movement comes in the wake of a U.S. plan to purchase oil for the Strategic Petroleum Reserve (SPR), which has provided crucial support to the market. As of 10:26 GMT, Brent crude futures rose by 74 cents, or 1.04%, to reach $72.16 per barrel, while U.S. West Texas Intermediate (WTI) crude increased by 68 cents, or 1%, to settle at $68.06 per barrel.
The rally follows a sharp decline in oil prices after Israel’s recent retaliatory strike on Iran, which raised concerns about potential disruptions to oil supply. However, with signs that the conflict is not escalating further, investor focus has shifted to broader economic concerns, particularly regarding future demand growth. Declining oil demand from China, the world’s largest crude importer, has emerged as a significant drag on global oil consumption and prices.
According to BP CEO Murray Auchincloss, global refining margins are struggling, reflecting sluggish economic activity in China. He stated that while demand remains below average, it is expected to rebound once Chinese President Xi Jinping implements new stimulus measures for the economy. “Following Israel’s retaliation, event risk has faded, leaving the oil market to face up to macroeconomic realities,” said Harry Tchilinguirian, group head of research at Onyx Capital Group.
Despite the supportive U.S. announcement, which seeks to acquire up to 3 million barrels of oil for the SPR, analysts remain cautious. Tchilinguirian noted that these purchases are insufficient to alleviate the widespread pessimism surrounding oil demand, particularly in China and Europe. As the market grapples with these realities, the American Petroleum Institute (API) is set to release a weekly report on U.S. crude inventories, with the Energy Information Administration (EIA) scheduled to provide further insights on Wednesday.
While the U.S. government’s intervention offers some relief, concerns about weak demand growth and global economic conditions persist, keeping oil prices under pressure. Investors and analysts alike will be closely watching upcoming reports to gauge the direction of oil prices in the coming weeks.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Please consult a qualified financial advisor or conduct your own research before making investment decisions.
