Oil prices closed higher on Monday, as Russian government orders to reduce oil production and attacks on energy infrastructure in both Russia and Ukraine offset calls from the United Nations for a ceasefire in Gaza.
Brent crude futures closed up $1.32, or 1.55 percent, at $86.75 a barrel, while U.S. crude futures rose $1.32, or 1, 64%, to $81.95.
Both benchmarks have risen steadily this year, with Brent rising nearly 11% and WTI about 12.5% at Friday’s close, amid expectations of falling interest rates in major economies and geopolitical tensions in Eastern Europe and the Middle East.
Meanwhile, Russia has ordered companies to reduce oil production in the second quarter to reach the production target of 9 million barrels per day (bpd) by the end of June, in line with its commitments to the group of oil producers. industry sources this Monday.
Attacks on Russian energy facilities and Ukrainian energy infrastructure have raised supply concerns, said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
On the other hand, the United Nations Security Council adopted this Monday a resolution calling for an immediate ceasefire between Israel and Hamas, as well as the release of all hostages, after the United States abstained from the vote.
“We will have to see how the UN ceasefire resolution in Gaza plays out in practice, and whether this ultimately results in a suspension of Houthi attacks on oil tanker traffic in the Red Sea,” said Andrew Lipow, president of Lipow Oil Associates.
Source: Terra
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