Oil prices rise amid fears of supply shortages

Oil prices rose in early Asian trading on Thursday amid concerns about supply shortages as major producers continue production cuts, coupled with signs of economic growth in the United States, the world’s largest oil consumer.

Brent crude futures for June climbed 15 cents, or 0.2 percent, to $89.51 per barrel at settlement by 0037 GMT. Meanwhile, US West Texas Intermediate crude futures for May also saw a 15-cent increase, or 0.2 percent, reaching $85.59 per barrel.

Both the June Brent contract and the May West Texas Intermediate crude contract have recorded gains over the past four days, closing on Wednesday at their highest levels since the end of October.

The uptick in oil prices followed Ukrainian attacks on Russian refineries, which led to a reduction in fuel supplies. Additionally, concerns arose over the potential expansion of the conflict between Israel and the Palestinian Islamic Resistance Movement (Hamas) in Gaza to include Iran, which could disrupt supplies in the Middle East region.

During a meeting held on Wednesday, senior ministers of the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia, opted to maintain their oil production policy unchanged. They also urged some countries to enhance compliance with production cuts, noting that some members will compensate for the increase in supplies in the first quarter.

Federal Reserve Chairman Jerome Powell’s recent comments expressing caution about future interest rate hikes also contributed to the positive sentiment in the oil market. Powell’s remarks were viewed as a reflection of strong economic growth in the United States.

Meanwhile, tensions escalated in the Middle East as Iran vowed to retaliate against Israel for an attack that occurred on Monday, resulting in the deaths of several senior Iranian military personnel. Iran, the third-largest producer in OPEC, stands at the center of these geopolitical concerns.