Oil prices neared a five-month high on Tuesday amid ongoing Middle East conflict as well as tightening supply from Mexico. Warren Patterson, head of commodities strategy for ING Groep NV, noted that tighter supply has been driven by OPEC+ supply cuts, “which is evident with the strength we have seen in timespreads”.
Brent futures rose by 0.5% to approach $88 per barrel, while West Texas Intermediate futures, the US crude benchmark, simmered above $84. Crude has risen by 14% since the start of the year, spurred by OPEC supply cuts. Still, supply outside of OPEC+ has also been stunted, with Mexico’s state-run oil company Pemex planning to halt exports of its Maya crude over the next few months.
Data from ICE Futures Europe showed that hedge funds are becoming increasingly bullish on crude, with money managers taking net-long positions on Brent that are at a 13-month high.
