Oil prices hit 2024 high on supply threats
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The news: Oil prices climbed overnight after Ukrainian attacks on Russian energy facilities and the escalating conflict in the Middle East pushed the benchmark to their highest level since October.
The numbers: Brent crude futures closed 1.7% higher at USD88.92 ($136.4) a barrel, after hitting a peak of USD89.08 during the session. US West Texas Intermediate (WTI) crude also gained 1.7% to USD85.15 a barrel.
The context: Prices rose after a Ukrainian drone struck Russia's third-largest oil refinery on Tuesday, hitting a unit that processes about 155,000 barrels of crude per day, Reuters reported.
Separately, Russia's Astrakhan gas processing plant also halted production after a repair-related stoppage on 30 March. Russia is among the top three global oil producers and one of the largest exporters of oil products. It has been contending with recent Ukrainian attacks on oil refineries, which could prompt tighter supplies globally.
Tensions also escalated in the Middle East, after Iran vowed to take revenge on Israel for an airstrike that killed two top generals and five military advisers at the Iranian embassy compound in Damascus. Analysts warned direct Iranian involvement could spark a region-wide conflict with plausible impact on oil supply.
This comes at a time when demand outlook has perked up with data showing an expansion in Chinese manufacturing activity for the first time in six months and in the US for the first time in a year and a half.
The source: Reuters
