English
English
Tiếng Việt
ภาษาไทย
繁體中文
한국어
Bahasa Indonesia
Español
Português
zu-ZA
0

Market Analysis

Middle East tensions cause oil prices to soar, but US crude inventories decline
Amos Simanungkalit · 7.7K Views

13

Oil prices rose for the third consecutive session on Thursday due to market concerns over supply risks from ongoing tensions in the Middle East, coupled with a significant drop in U.S. crude inventories.

Brent crude futures climbed 6 cents, or 0.1%, to $78.39 a barrel by 0540 GMT, while U.S. West Texas Intermediate crude increased by 16 cents, or 0.2%, reaching $75.39. Both benchmarks have rebounded from near-2024 lows experienced earlier this week due to fears of a U.S. recession and a global stock selloff.

Market anxiety about potential Middle East supply disruptions intensified following the recent deaths of senior members of militant groups Hamas and Hezbollah. This has raised concerns about possible retaliatory actions by Iran against Israel, further compounded by production issues in Libya.

ANZ Research noted that the market is apprehensive about Iran's potential response, which could escalate into a broader regional conflict and impact oil supplies. Libya's National Oil Corporation has declared force majeure on its Sharara oilfield, citing reduced production due to protests.

Although no immediate supply disruptions have occurred amid rising Middle East tensions, attacks on ships in the Red Sea have forced tankers to take longer routes, resulting in extended oil transport times.

In the U.S., crude inventories fell by 3.7 million barrels, surpassing analyst expectations of a 700,000-barrel draw and marking the sixth consecutive weekly decline to six-month lows. ANZ analysts pointed out that this indicates strong demand for physical oil barrels despite concerns about economic slowdowns.

Citi analysts suggested that oil prices could rebound to the low-to-mid-$80s for Brent, citing factors such as tight market balances through August, heightened geopolitical risks in North Africa and the Middle East, potential weather-related disruptions during hurricane season, and light managed money positioning.

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author.

Need Help?
Click Here