Oil prices surge to seven-week high

Oil prices have surged to their highest levels in seven weeks, driven by a mix of optimism surrounding summer demand and concerns over escalating conflicts. Despite a recent report indicating an unexpected rise in US crude inventories, Brent crude futures saw a 0.3% increase, reaching $85.56 per barrel, while US West Texas Intermediate crude rose by 0.2% to $81.75 per barrel.

Analysts are pointing out that although the current situation may appear subdued, there are positive indicators suggesting a brighter future. The significant $8 increase in Brent prices from their early June lows reflects a growing confidence in a tighter global oil market.

Both Brent and US crude benchmarks have displayed robust recoveries over the past fortnight, with prices hitting seven-week highs following a drone strike in Ukraine that resulted in a fire at a major Russian oil terminal.

The recent surge in oil prices underscores the delicate balance between supply and demand in the global oil market. While concerns over conflicts and unexpected inventory rises persist, the optimism surrounding summer demand continues to drive prices higher. It is essential for market participants to closely monitor these developments to gauge the future trajectory of oil prices.