Oil Prices Rally Ahead of Iran Attacks on Israel
The global commodities market rallied further with oil prices maintaining an uptrend on Friday as the market braced for a potential direct attack on Israel from Iran during the weekend. Brent crude is up 1% at $90.67 a barrel, while US West Texas Intermediate (WTI) trade 1.2% higher at $86.07 a barrel.
A direct confrontation between Israel and Iran would signal a dramatic escalation of conflict in the Middle East, leading to a significant rise in crude on fears of supply disruptions, according to market watchers.
But prospects of higher-for-longer interest rates dampening demand are capping further price gains. Meanwhile, the International Energy Agency trimmed its oil-demand growth forecast for this year on weaker consumption in wealthier countries, and said it expects growth to slow further next year.
The IEA cut its forecast for oil-demand growth this year and said the pace of expansion is set to further decelerate in 2025 as the post-pandemic rebound runs its course and the electric-vehicle rollout weighs on consumption.
Oil demand growth is now seen at 1.2 million barrels a day from previously 1.3 million barrels a day, the Paris-based organization said in its latest monthly report. Total demand is still expected to average 103.2 million barrels a day.
Demand continued to lose momentum at the start of the year, growing 1.6 million barrels a day in the first quarter, below the IEA’s expectations due to significantly weak deliveries in OECD countries. Unusually warm weather curtailed heating use, while a protracted factory slump in advanced economies continued to reduce demand for industrial fuels.
