Oil Rises as Supply Risks Cloud Weak Demand Outlook
Oil prices increased in the global commodities market on Friday as supply risks continue to cloud weak demand outlook. Brent crude rose to $77.15 per barrel while US benchmark West Texas Intermediate (WTI) increased by 0.83% to $73.85 per barrel.
Concern that ongoing conflict between Israel, Hamas and Hezbollah in the Middle East may spread to a wider area and cause a disruption in oil supply supported price increase.
According to the Lebanese Civil Defense Directorate, 10 people, including 5 paramedics, lost their lives and 12 people were injured in two air strikes carried out by Israeli warplanes in the south of Lebanon on late Wednesday.
Many countries are evacuating their citizens in Lebanon due to the ongoing attacks. Hezbollah said Thursday it targeted group of Israeli soldiers in vicinity of Al-Marj military site, Kiryat Shmona settlement with rocket salvos. The move comes after the Israeli army said Wednesday that it eliminated a member of Hezbollah’s ‘Golan Network’ in southwestern Syria in an airstrike.
Israel continues its attacks on Gaza despite international calls for a ceasefire. Seven Palestinians, including three children, were killed in new Israeli airstrikes in the southern Gaza Strip early Thursday, a medical source said.
The US, the world’s biggest oil consumer, is grappling with consecutive hurricanes as the newest storm, named hurricane Milton, leaves more than 2 million residents without electricity in the state of Florida.
As locals were urged to evacuate the area under threat of massive destruction due to the storm, long lines formed in many gas stations in Florida.
The increase in fuel demand put many gas stations in danger of running out of gasoline which residents need to fill their vehicle tanks or use to power their generators.
Meanwhile, experts forecast a surge in oil demand following new incentives to stimulate the economy in China, the world’s biggest oil importer.
The government is expected to announce more fiscal stimulus plans over the weekend to support the country’s economy.
Yesterday, crude oil prices recovered as the market switched back to focusing on supply concerns. Over the past few sessions, the oil market has been constantly vacillating between demand and supply concerns making for a highly volatile period, ING commodities strategists said in a note.
Analysts said the market awaits any potential Israeli retaliation against Iran for missile attacks. While the US and other Gulf nations have been pushing for Israel not to target oil infrastructure, this can’t be ruled out completely.
The latest refined products inventory data from Insights Global indicates that gasoil stocks in the ARA region decreased by 118kt week-on-week to 2.3mt for the week ending on 10 October.
Similarly, fuel oil inventories fell by 137kt to 1.24 million barrels over the reporting week. In contrast, gasoline inventories in the region rose by 122kt over the week to 1.1mt.
US natural gas edged higher yesterday despite a bearish weekly inventory report EIA. The weekly data shows that US gas storage increased by 82Bcf last week, higher than the 72Bcf increase the market was expecting. #Oil Rises as Supply Risks Cloud Weak Demand Outlook
