Oil prices rise, set for second straight week of gains

Oil prices are rising on geopolitical and supply concerns, with Brent (BZ=F) up 20% year-to-date and WTI (CL=F) up about 23% in 2024. Brent crude is now trading at around $90 per barrel, which is not only a key psychological level, but could be a point where some buyers start to pull back on their demand due to prices being too high.

Yahoo Finance Senior Business Reporter Ines Ferré breaks down what is driving prices.

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Editor's note: This article was written by Stephanie Mikulich

Video transcript

- Iran blaming Israel for a deadly airstrike on its embassy in Syria and vowing revenge. OPEC Plus also having an impact on the move in prices, but can it push it towards $100 a barrel? For all this and much, much more, we've got Yahoo Finance's Ines Ferré here to break it down. Hey, Ines.

INES FERRE: Hey, Brad. Yeah, once we start hitting $90 a barrel for brent crude, then analysts are talking about $100 a barrel. So we are watching WTI that's above $86 a barrel. Brent crude above $91 a barrel. So this is a very important psychological level. Because at some point, when oil gets too high, it does start to create demand destruction.

But a lot of reasons of why we've gotten here with year to date. Brent crude up 20%. WTI up more than 23%. A lot of this has to do with geopolitical risks. A lot of this also has to do with OPEC Plus standing firm on its output cuts. We did have inventories last week that rose unexpectedly, but that could have more of an effect with respect to the refineries because we've had some refineries that have been down.

So they may have been waiting for those barrels, for that oil, to refine that oil. So that may explain part of the reason why we saw an increase in inventories, doesn't necessarily say too much about demand. But look, some analysts are saying that in order to get to $100 a barrel, things would have to stay the way they are right now.

But there are levers that could be pulled beforehand. For example, well, demand destruction could start kicking in. You could have the US also release some more SPR as well. One analyst saying that even though this rally is justified, you are looking right now at an over-bought scenario. So there is a correction that some analysts are expecting soon.