Oil prices at highest level since May, cross $110 a barrel

Fuel oil prices have seen a major surge in the international market. Last week, the price of Brent crude oil settled at $109.86 a barrel, the highest weekly closing price since May. In a single day, the day before yesterday, oil prices rose by $3.94, or 3.7 percent, while the increase over the whole week stood at 4.9 percent. As a result, the crude oil market this week is essentially revolving around the psychological line of $110.

According to market analysts, ongoing geopolitical tension in the Middle East and major disruptions in the supply chain have pushed oil prices to this height. Shortly before markets closed the day before yesterday, the Saudi Arabia-backed coalition announced that it had intercepted a ballistic missile fired toward the Red Sea export port of Yanbu. In addition, fresh concern has arisen over the supply of diesel and fuel products after a Ukrainian drone strike damaged a major refinery in Russia.

Meanwhile, oil stocks are also running down fast in the US market. Last week, the country’s commercial crude oil inventories fell by 8.6 million barrels, the biggest drop since February. Volatility in the market has increased further as the normal movement of oil through the Strait of Hormuz has been disrupted, and emergency stock releases and diesel supply initiatives taken by various governments have failed to meet immediate demand.

Energy experts expect that if the situation becomes more complicated in the coming days, the price of Brent crude could reach $115, while if supply returns to normal, it could fall back to $100.