Oil prices rose 4% amid a possible escalation between Israel and Iran

Speculative increase in global oil prices by more than 4% during the week was caused by new attacks by Ukrainian drones on Russian refineries, an Israeli strike on a building on the territory of the Iranian consulate in Syria, which killed two Iranian generals and five IRGC officers who controlled Iranian proxies in Lebanon and Syria. After that, the IRGC warned Israel to prepare a response in the form of "death strikes".

During the week, quotations for palm oil rose by 6.5%, and for soybean oil - by 2.4%, against the background of rising oil prices.

June Brent oil futures for the week rose by 4.7% to $89/barrel (+9% for the month, +14% for the year) on political news, not reacting to the increase in stocks in the USA and increasing supplies from the Russian Federation .

U.S. crude oil inventories rose by 3.21 million barrels to an 8-month high, according to the EIA's weekly report, although experts expected a 1 million barrel decline. At the same time, gasoline stocks unexpectedly decreased by 4.26 million barrels, while the market expected their increase by 0.1 million barrels.

U.S. crude oil production averaged 13.1 million barrels per day in the March 23-29 period, matching the previous week's figure and falling short of a recent record of 13.3 million barrels per day.

According to Baker Hughes, the number of active oil rigs in the USA for March 23-29 decreased by 3 to 506 units, which is slightly higher than the 2-year low of 494 units recorded on November 10, 2023, although in December 2022 it reached 3.5- annual maximum of 627 units.

The attack by Ukrainian UAVs on a refinery in Tatarstan increased concerns about a reduction in oil supplies from the Russian Federation, but according to JPMorgan Chase, for March 25-31, the Russian Federation increased oil exports compared to the previous week by 270 thousand barrels per day to an annual maximum of 3.74 million barrels /day This confirms that the reduction of processing capacities contributes to the increase of oil exports.

At the meeting of OPEC+ on April 3, plans to cut oil production by the end of June by 2 million barrels per day were left unchanged, although OPEC members in March increased production by 10 thousand barrels per day to 26.86 million barrels per day, as some countries produce more than established quotas.

Oil prices will be supported by the escalation of the war between Israel and Hezbollah (Lebanon) and Iran's push for direct conflict, which will increase tensions in the main production region.