Oil prices rose slightly in Asian trade today on concerns that conflict in the Middle East region could escalate and despite falling demand for the fuel in the United States, Reuters reported.
European North Sea Brent futures for June delivery added 9 cents, or 0.1 percent, to $88.11 a barrel.
U.S. light crude futures rose 7 cents to $82.88 a barrel.
The latest data from the US Energy Information Administration (EIA) last night revealed that gasoline demand in the week ending April 19 fell 2.8 percent from the previous week and 11 percent year-on-year , broadcasts BTA. The demand for distillate fuel decreased by 4.7 percent compared to a year ago.
Declining fuel demand comes amid signs of a cooling in US business activity in April. Stronger-than-expected inflation and employment suggest the Federal Reserve is more likely to delay the start of its rate-cutting cycle, weighing on business sentiment.
At the same time, tensions in the Gaza Strip between Israel and Hamas are expected to further escalate as Israel may launch an attack on the town of Rafah, in the southern part of the enclave. This, in turn, could increase the chances of the conflict expanding, experts warn.
“Tensions between Iran and Israel have eased, but Israeli attacks on Gaza are expected to increase, and the risk of conflict spreading to neighboring countries is at the heart of oil price movements,” commented Toshitaka Tazawa, an analyst at Fujitomi Securities Co. Ltd.).
