Oil prices steady after two days of gains

Oil prices held steady on Thursday after two sessions of gains, with growing supply risks in the Middle East offsetting demand concerns that had pushed prices to their lowest since early 2024 at the start of the week. Brent crude futures fell 8 cents, or 0.1%, to US$78.25 a barrel by 1100 GMT. U.S. West … The post Oil prices steady after two days of gains appeared first on Asaase Radio.

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Aug 8, 2024 - 13:25

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Oil prices steady after two days of gains

Oil prices held steady on Thursday after two sessions of gains, with growing supply risks in the Middle East offsetting demand concerns that had pushed prices to their lowest since early 2024 at the start of the week.

Brent crude futures fell 8 cents, or 0.1%, to US$78.25 a barrel by 1100 GMT. U.S. West Texas Intermediate crude gained 2 cents, or 0.03%, to S$75.25.

Brent had gained 2.4% on Wednesday and WTI 2.8% in a second straight session of gains as prices recovered from a sharp drop on Monday, when Brent settled at its lowest since early January and WTI early February.

Prices were supported on Wednesday by a 3.7 million barrel drop in U.S. crude inventories, far exceeding analyst expectations of a draw of 700,000 barrels and marking a sixth straight weekly decline to six-month lows.

The data suggested that demand was stronger than anticipated and physical markets continue to be tighter than forecast, said Panmure Liberum analyst Ashley Kelty.

“However, crude markets still face headwinds from faltering demand in China and the U.S., and the potential addition of supply by the OPEC+ cartel from Q4,” Kelty added.

Prices also drew support from rising tension in the Middle East and force majeure declared on output at Libya’s Sharara oilfield, said PVM analyst John Evans said.

The killing of senior members of militant groups Hamas and Hezbollah last week raised the possibility of retaliatory strikes by Iran against Israel, further fuelling concerns over oil supply from the world’s largest producing region.

“The market has been on edge as it awaits a response from Iran,” ANZ Research said in a note.

Libya’s National Oil Corporation declared force majeure at its Sharara oilfield from Tuesday, a statement said, adding that the company had gradually reduced the field’s production because of protests.

Analysts at Citi said there was a possibility of a bounce in prices to the low to mid-$80s for Brent.

“Upside risks in the market remain, from still-tight balances through August, heightened geopolitical risks across North Africa and the Middle East, the possibility of weather-related disruptions through hurricane season and light managed money positioning,” Citi said.

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