Oil prices surge due to increased demand and geopolitical tensions

Oil prices saw an uptick on Thursday as a result of multiple factors contributing to increased demand. Brent crude futures for July climbed by 0.7% to $84.15 per barrel, while U.S. West Texas Intermediate crude for June also rose by 0.7% to $79.55 per barrel.

In the United States, the world's largest oil consumer, crude inventories fell by 1.4 million barrels to 459.5 million barrels last week, surpassing expectations of a 1.1 million-barrel decrease. This drop was linked to a rise in refinery activity by 307,000 barrels per day during the same period.

Meanwhile, China, the top oil importer globally, experienced a notable increase in crude imports. In April, the country received 44.72 million metric tons of crude, equivalent to approximately 10.88 million barrels per day, marking a 5.45% rise from the previous year. These figures played a significant role in driving the upward trend in oil markets.

Furthermore, the uncertainty surrounding a potential ceasefire between Israel and Hamas added support to the surge in oil prices. While Hamas showed reluctance to make concessions in the negotiations, the U.S. hinted at the possibility of an agreement being within reach.

Although oil prices have experienced a boost in the short term, reaching the levels observed in April above $90 per barrel may pose challenges due to geopolitical tensions. Market analysts caution that sustaining such high prices could prove to be difficult in the current global scenario.