Oil closes higher, with renewed geopolitical tensions and reduced supply

Oil closed robustly higher for the second day in a row and renewed intraday highs since October 27, amid renewed tensions in the Middle East and Ukraine, and after rumors that Mexico plans to reduce exports of the commodity in the coming months to supply the market internal.

WTI for May closed up 1.72% (US$1.44), at US$85.15 per barrel, on the New York Mercantile Exchange (Nymex). Brent for June, in turn, this Tuesday advanced 1.72% (US$ 1.50) on the ICE, to US$ 88.92 a barrel.

On Monday night, a spokesman for the Iranian Foreign Ministry said the government would take action in response to the Israeli attack on Iran’s consulate in Damascus, Syria, which intensified concerns about the possibility of a reduction in supply. of Iranian oil.

Consultancy Rittersbusch writes that tensions also escalate as Russia and Ukraine exchange attacks on each other’s energy facilities.

Oil price

According to Bannockburn, oil prices this Tuesday were boosted by news that Mexico will concentrate its production to increase domestic supplies of diesel and gasoline, which should reduce exports of the commodity to the US and other regions.

Also on Tuesday, news circulated that a major Russian gas processing plant controlled by Gazprom had halted production of petroleum products following a repair shutdown on March 30. Also on April 2, Russia’s largest natural gas producer, Novatek, announced that it had suspended its production at the Arctic LNG 2 plant, due to Western sanctions and amid a shortage of gas tanks.

Now, investors are already turning their eyes to the meeting of the Organization of Petroleum Exporting Countries and allies (OPEC+), which takes place on Wednesday, although it is widely expected that the cartel will keep its production cuts unchanged.

*With information from Dow Jones Newswires