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Oil prices up as uncertainty looms over Iran president’s fate

May 20, 2024

Key points:

  • Brent crude rose 0.3% to $84.24; WTI gained 0.2% to $80.21.
  • U.S. replenishes Strategic Petroleum Reserve with 3.3 million barrels at $79.38 each.

Oil prices edged higher in early Asian trading on Monday, adding to last week’s gains. This increase came as rescuers searched for Iran’s President following a helicopter crash in the oil-producing nation and as the U.S. moved to replenish its national stockpile.

Chart displaying crude oil prices rising to 79.821 with a trend of 0.33%, amid uncertainty following the crash of a helicopter carrying Iranian President Ebrahim Raisi. The chart features moving averages (MA) and MACD indicators, reflecting market reactions to the geopolitical event. Image hosted by VT Markets, a forex CFDs brokerage

Picture: Oil prices on the rise as seen on VT Markets app.

Brent crude (BRN1!) rose by 26 cents, or 0.3%, to $84.24 a barrel by 0049 GMT. U.S. West Texas Intermediate crude (WTI) (CL1!) gained 15 cents, or 0.2%, to $80.21 a barrel. Brent ended the previous week up about 1%, its first weekly gain in three weeks, while WTI rose 2%, buoyed by improved economic indicators from the U.S. and China, the world’s largest oil consumers.

Also read: Oil poised for weekly gain on rising demand 

A helicopter carrying Iranian President Ebrahim Raisi crashed on Sunday, according to an Iranian official. The lives of President Raisi and Foreign Minister Hossein Amirabdollahian were at risk, the official said. Despite this regional volatility, oil prices moved only slightly.

US government capitalises on cheaper oil prices

The U.S. government has capitalised on the recent drop in oil prices, announcing late last week that it had purchased 3.3 million barrels of oil at $79.38 a barrel to help refill its Strategic Petroleum Reserve.

Supporting the market last week, signs of easing inflation in the U.S. boosted expectations of interest rate cuts. This could decrease the value of the dollar, making oil cheaper for holders of other currencies.

Trade Crude Oil Futures (Symbol: CLOIL) now 

As we move forward, market participants will be closely watching the upcoming OPEC+ meeting for any hints of changes in output policy. Additionally, the ongoing geopolitical tensions and U.S. economic data will play crucial roles in shaping the oil market’s direction. Traders should remain vigilant and be prepared for potential volatility in the coming weeks

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