Oil near 2-month high on positive demand outlook ahead of busy travel season

By Zeynep Beyza Kilic

Oil prices continued to linger near two-month highs with positive demand outlook amid expectations of a busy travel season during the summer.

International benchmark Brent crude traded at $86.83 per barrel at 09.33 a.m. local time (0633GMT), up 0.27% from the closing price of $86.60 per barrel in the previous trading session.

American benchmark West Texas Intermediate (WTI) traded at $83.53 per barrel, a 0.18% rise from the previous session, when it closed at $83.38 per barrel.

Demand for fuel is expected to grow as the travel-heavy summer vacation season begins.

If official data from the Energy Information Administration (EIA) due on Wednesday reveals a reduction in the amount of gasoline and oil stockpiles, prices are predicted to gain further upward support.

The US, the world's biggest oil consumer, will kick off travel season with Independence Day holiday on Thursday, July 4. Forecasts from the American Automobile Association showed that overall travel during the holiday period will be 5.2% higher than in 2023, with car travel up 4.8% from last year.

Meanwhile, the long-standing Israeli-Palestinian conflict is continuing to raise geopolitical risks in the Middle East.

Israel is continuing its relentless onslaught on the besieged Gaza Strip. Latest Health Ministry data said the overall death toll since last Oct. 7 reached 37,900.

The Israeli army ordered Palestinians living in eastern areas to immediately leave ahead of a possible new ground assault in Khan Yunis, Gaza early Tueaday. Yemen's Houthi group announced Monday that they carried out military operations targeting four ships in the Red, Arabian, and Mediterranean Seas and Indian Ocean in solidarity with Palestinians in Gaza.

Tension is also high in the region amid ongoing conflict between Israel and Hezbollah. Lebanese Foreign Minister Abdullah Bou Habib urged countries on Friday to show solidarity with Lebanon in the face of Israeli threats to launch a war.