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Amid increased oil demand, prices stay at two-month peak

Amid increased oil demand, prices stay at two-month peak

Oil prices stabilized on Tuesday, remaining near two-month highs achieved in the previous session, as an increase in fuel demand is anticipated during the summer season. Additionally, potential interest rate cuts in the U.S. may also boost economic growth.

Brent crude futures rose by 0.27% to $86.83 per barrel. U.S. WTI crude also increased by 0.20%, reaching $83.53 per barrel.

In the U.S., the world's largest oil consumer, gasoline demand is forecast to grow during the summer tourism season, which begins with the Independence Day holiday. The American Automobile Association predicts travel will increase by 5.2% during this period compared to 2023, with car travel expected to rise by 4.8% year-over-year.

"This could potentially contribute to a recovery in gasoline demand after a sluggish first half of 2024," noted ANZ analysts in a recent market analysis.

Regarding supply, market participants are monitoring the potential impact of Hurricane Beryl on oil refining and offshore production in the U.S. Although initial forecasts anticipated potential disruptions, the storm is now expected to move towards the Bay of Campeche in Mexico, creating problems for oil extraction in that region. Beryl rapidly intensified, reaching Category 4, and swept through the Caribbean Sea on Monday, prompting warnings from the U.S. National Hurricane Center about an "extremely dangerous situation."

Overall, market sentiment continues to be shaped by a combination of demand prospects, geopolitical events, and weather-related risks, with investors closely watching any updates that could impact oil prices in the near future.

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