Oil prices rose as Israel’s war in the Gaza Strip grew more likely to expand to include Lebanon, despite a sudden rise in US inventories that reinforced fears of a slowdown in demand from the world’s biggest oil consumer.
After earlier declines, Brent crude futures were up 40 cents, or 0.5%, at $85.65 a barrel at the time of writing, and US West Texas Intermediate crude futures were up 38 cents, or 0.47%, at $81.28 a barrel.
Both the benchmarks registered a slight increase yesterday to Wednesday’s settlement.
US stocks
The U.S. Energy Information Administration reported that the nation’s crude oil inventories rose by 3.6 million barrels last week, surprising analysts cited by Reuters who had expected a decline of 2.9 million barrels.
U.S. gasoline stocks rose by 2.7 million barrels, compared with analysts’ expectations for a decline of one million barrels.
In the Middle East, cross-border tensions between Israel and Lebanon, particularly in southern Lebanon, have heightened fears of an all-out war between Israel and Hezbollah in recent weeks, which could draw in other regional powers, including Iran. The price decline has been limited.
Gold
Amid markets, gold prices were steady today after falling to a two-week low in the previous session, as investors awaited US inflation data and looked for indicators of the Federal Reserve’s path to interest rate cuts. rates.
Gold, at its lowest level since June 10 yesterday, rose 0.67% to $2,313.69 an ounce in overnight trades at the time of writing.
The dollar is near an 8-week high, and gold is costlier for holders of other currencies.
Tim Waters, chief market analyst at KCM Trading, said, “The gold price looks like it’s swimming against the tide with the rising dollar and rising bond yields.”
This week, markets await US first-quarter GDP estimates today and personal consumption expenditure inflation data tomorrow Friday.
While the precious metal is considered a hedge against inflation, higher interest rates increase the opportunity cost of owning non-yielding assets.
