Friday, July 12, 2024

Oil prices rise 1%… Brent crude above $93

Date:

During today’s trade, Friday, October 20 (2023), oil prices rose around 1%, reaping gains for the third straight session and heading for a second straight week of gains.

It comes as fears grow that the escalation of fighting in the Gaza Strip could spill over into the Middle East and disrupt supplies to one of the world’s biggest producers.

Oil prices ended trading yesterday, Thursday, October 19, with an increase of more than 1% after US data showed a larger-than-expected decline in oil inventories.

Oil price today

By 06:34 AM GMT (09:34 AM Mecca time), Brent crude oil futures – for December 2023 delivery – were up 0.76% at $93.08 a barrel.

Meanwhile, US West Texas Intermediate crude futures – for November 2023 delivery – rose 0.93% to $90.20 a barrel, according to figures seen by the specialist energy site.

Both contracts are headed for a second weekly gain after an explosion at a hospital in Gaza this week and an expected ground invasion by Israeli forces heightened fears that the conflict could spill over into the Middle East.

An oil tanker tries to unload cargo at a Chinese port – Photo Reuters

Oil price analysis

“The biggest concern is that the escalation of tensions we may see over the entry of Israeli forces into Gaza this weekend is moving risks to crude oil higher,” said IG analyst Tony Sycamore.

Israeli Defense Minister Yoav Galant told troops gathered at the Gaza border on Thursday that they would soon see the Palestinian territories “from the inside.”

The Pentagon said the US had intercepted missiles fired at Israel from Yemen, raising concerns about an escalation of the conflict.

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A break through resistance at $91.50 could see WTI prices finally rise to $95.03 a barrel by the end of September, Sycamore said. Reuters.

Oil supply

Oil prices are getting support after major producers Saudi Arabia and Russia extended supply cuts until the end of the year, and expectations of a widening deficit in the fourth quarter, particularly amid a slump in inventories in the United States.

The U.S. Energy Department said on Thursday that Washington is seeking to buy 6 million barrels of crude to supply the Strategic Petroleum Reserve in December and January as it continues its plan to replenish emergency stockpiles.

Separately, sources in OPEC+ said the temporary lifting of US oil embargoes on OPEC member Venezuela would not require any change in OPEC+ producer group policy at present, as production recovery would be gradual.

“The prospect of more Venezuelan oil has done little to allay fears of unrest in the Middle East,” analysts at ANZ Research said in a note to clients on Friday.

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Nadia Barnett
Nadia Barnett
"Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator."

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