Oil prices increase due to worries about reduced supply and indications of economic growth in the U.S.

On Thursday, oil prices rose in early Asian trade due to concerns about lower supply and signs of stronger economic growth in the U.S. The June Brent contract and May WTI contract both saw gains, with the June Brent contract rising for four consecutive days.

Geopolitical factors such as Ukraine’s attacks on Russian refineries affecting fuel supply and concerns about potential disruptions in the Middle East region due to the Israel-Hamas conflict contributed to the rise in prices. A meeting of top ministers from OPEC and its allies, including Russia, on Wednesday maintained the current supply policy and urged some countries to adhere to output cuts more strictly. Russia also announced a shift towards output restrictions rather than export curbs.

Federal Reserve Chair Jerome Powell’s cautious approach towards future interest rate hikes, citing strong job growth and inflation, was viewed positively for oil prices as it indicated robust economic growth in the U.S. In the Middle East, Iran’s vow of retaliation against Israel for a recent attack further added to concerns about supply disruptions, as Iran is a significant producer within OPEC.

By Sophia Gonzalez

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