Basrah crudes surge despite global oil decline

Shafaq News / On Tuesday, the prices of Basrah Heavy and Basrah Medium crude oils inched up, despite a decline in global oil markets.

Basrah Heavy crude rose by 76 cents to $82.69 per barrel, while Basrah Medium crude increased by 76 cents to $85.64 per barrel.

Global oil prices fell, with investors anticipating lingering U.S. inflation and higher interest rates to depress consumer and industrial demand.

Brent crude futures fell 44 cents, or 0.53%, to $83.27 a barrel. West Texas Intermediate crude (WTI) slipped 51 cents, or 0.64%, to $79.29 a barrel.

Both benchmarks fell less than 1% on Monday as U.S. Federal Reserve officials said they were awaiting more signs of slowing inflation before considering interest rate cuts, as reported by Reuters.

"Fears of weaker demand led to selling as the prospect of Fed rate cut became more distant," said analyst Toshitaka Tazawa at Fujitomi Securities.

Fed Vice Chair Philip Jefferson said on Monday it was too early to tell whether the inflation slowdown is "long lasting," while Vice Chair Michael Barr said restrictive policy needs more time. Atlanta Fed President Raphael Bostic said it will "take a while" for the central bank to be confident that a price growth slowdown is sustainable, according to Reuters.

Lower interest rates reduce borrowing costs, freeing up funds that could boost economic growth and demand for oil.

On the other hand, the market appeared little affected by political uncertainty in two major oil-producing countries.

"While there has been an upmove over some uncertainty in Iran, prices have since pared back some gains, as investors price for the status-quo in terms of policies for now and that any wider regional conflict remains off the table," IG market strategist Yeap Jun Rong said in an email to Reuters.

Iranian President Ebrahim Raisi, a hardliner and potential successor to Supreme Leader Ayatollah Ali Khamenei, was killed in a helicopter crash, while Saudi Arabia's Crown Prince Mohammed Bin Salman deferred a trip to Japan because of the health of his father, the king.

"The death of the Iranian President and the Saudi king's health issue don't seem to be affecting the market much, as it is unclear whether they will have an immediate impact on energy policy," Fujitomi's Tazawa said.

Investors are focusing on supply from the Organization of the Petroleum Exporting Countries and its affiliates, together known as OPEC+. They are scheduled to meet on June 1 to set output policy, including whether to extend some members' 2.2 million barrels per day of voluntary cuts.

"Prices remain in wait for a catalyst to drive a breakout of the current range, with eyes still on any geopolitical developments, along with oil inventories data this week," Yeap said.

OPEC+ could extend some voluntary output cuts if demand fails to pick up, people with knowledge of the matter previously told Reuters.