Brent Crude has risen above $45 per barrel on Wednesday, a five month high, in the wake of the deadly explosion at Lebanon’s main port in the capital Beirut on Tuesday. This is the first time oil price is rising above $45 per barrel since the crash on 9 March 2020.
The prices of oil has been somewhat zig zag, hovering around $40 since mid June, as investors weigh between the optimism of improved demand due to economic recovery and the mounting coronavirus cases worldwide and in the United States.
Brent futures gained for a fourth day on Wednesday and is trading at $45.39 per barrel as at 09:56 GMT on Wednesday, representing an increase of 2.16% ($0.96). While U.S oil Futures Western Texas Intermediate (WTI) is 2.30% ($0.96) up to $42.66 per barrel.
Nigeria banner oil Bonny Light closed at $43.76 per barrel whereas OPEC basket stood at $44.27 per barrel.
Lebanon is facing its worst financial and economic crisis, with sharp rise inflation deep plunge in the value of its local currency in addition to high rate of unemployment. Tuesday explosion has sparked fears of instability in the region, according to Bloomberg.
“Tensions are high and that just kind of puts a fine point on it,” said John Kilduff, a partner at Again Capital LLC. “Looks like there’s going to be a draw in crude oil again, so we got that support as well.”
U.S Crude inventories were down by 8.6 million barrels in the week to Aug. 1 to 520 million barrels to Bloomberg. compared with analysts’ expectations for a drop of 3 million barrels. Official figures from the U.S. Department of Energy are due out later on Wednesday.