Commodities

Crude oil rises on Middle East supply disruption concerns

Published

2 weeks ago

October 3, 2024

Investing.com — Oil prices rose Thursday on concerns that the escalating Middle East conflict could disrupt crude flows from this key exporting region.

By 08:40 ET (12.40 GMT), the futures traded 2.2% higher at $71.61 a barrel and the contract climbed 1.9% to $75.33 a barrel.

Crude rises on Middle East tensions

The crude benchmarks continue to push higher as traders await Israel’s response to Iran firing more than 180 missiles into its territory, given the potential for any response to target Iranian oil infrastructure, hitting the supply of a senior OPEC member.

“There have been suggestions that Israel could target Iranian oil facilities, which would have the potential to push oil prices significantly higher depending on the scale of the attack,” said analysts at ING, in a note.

“Iran exports roughly 1.7m b/d of crude oil, so the potential impact is meaningful,” ING added. “However, an attack on oil facilities may upset the US, particularly as we move closer to elections. A more limited response would be hitting launch sites used for the recent missile attack, while a significant escalation would be if Israel decided to target Iranian nuclear facilities.”

OPEC+ keeps output unchanged

The members of the Organization of Petroleum Exporting Countries and allies, a group widely known as OPEC+, met on Wednesday, and recommended no change to its output policy.

The group is scheduled to raise output by 180,000 barrels per day each month, starting in December.

“The only thing mentioned about the geopolitical situation and the conflict was the hope for non-escalation,” said an OPEC+ source familiar with the discussions, according to Reuters.

While OPEC has enough spare capacity to compensate for the loss of Iranian supplies, much of that capacity is in the Middle East Gulf region and potentially vulnerable should the conflict escalate further, said Giovanni Staunovo, analyst at UBS.

US crude inventories rise – EIA

U.S. crude inventories rose by 3.9 million barrels to 417 million barrels in the week ended Sept. 27, the Energy Information Administration said on Wednesday, compared with expectations of a 1.3 million barrel decline.

Commodities

Oil prices steady but set for steep weekly losses on demand fears

Published

1 hour ago

October 18, 2024

Investing.com — Oil prices steadied Friday, helped to a degree by positive U.S. inventory data, but were headed for their worst week since early-September amid growing concerns over weak demand.

At 08:30 ET (12:30 GMT), fell 0.1% to 74.41 a barrel, while climbed 0.1% to $70.69 a barrel.

China GDP grows as expected, stimulus in focus

Data released earlier Friday showed that China’s grew 4.6% year-on-year, largely as expected, while slightly missed expectations. This brought to 4.8%, still below the government’s 5% annual target.

The reading underscored the need for more stimulus from Beijing, especially as the world’s biggest oil importer grapples with persistent deflation, weak private spending and a prolonged property market crisis.

While the country has announced a raft of measures in recent weeks, investors were still underwhelmed by a lack of clarity on the implementation, timing and scale of the planned measures.

US inventories fall

The crude market was helped after data showed U.S. shrank in the past week, offering some positive cues on demand in the world’s biggest fuel consumer.

Focus also remained on Israel’s retaliation against Iran over a strike earlier in October. Concerns that the strike could disrupt Iranian oil supplies saw traders attach some risk premium to crude.

Oil heads for weekly losses on demand fears

However, both benchmark contracts were set to lose around 6% this week – their worst weekly performance since early-September – battered by heightened concerns over weak demand, especially after both the International Energy Agency and the Organization of Petroleum Exporting Countries cut their annual forecasts for demand growth.

Both organizations cited concerns over sluggish Chinese demand, especially as recent economic readings presented little improvement in the country.

(Ambar Warrick contributed to this article.)

Commodities

Oil prices set for biggest weekly loss in over a month on demand worries

Published

1 hour ago

October 18, 2024

By Arunima Kumar

LONDON (Reuters) -Oil futures in inched lower and were headed for more than a 6% weekly drop on Friday on concerns about demand from China’s slowing economy and easing supply risk from the Middle East conflict.

futures inched 33 cents lower, or 0.44%, to $74.12 a barrel by 1143 GMT, while U.S. West Texas Intermediate crude was at $70.41 a barrel, down 26 cents, or 0.4%.

The benchmarks are set to fall more than 6% this week, their biggest weekly decline since Sept. 2, after OPEC and the International Energy Agency cut their forecasts for global oil demand in 2024 and 2025.

Fears also eased about a potential retaliatory attack by Israel on Iran that could disrupt Tehran’s oil exports.

In China, the world’s top oil importer, the economy grew at the slowest pace since early 2023 in the third-quarter, though consumption and industrial output figures for September beat forecasts.

China’s refinery output also declined for the sixth straight month as weak fuel consumption and thin refining margins curbed processing.

Meanwhile, China’s central bank rolled out two funding schemes that will initially pump 800 billion yuan ($112.38 billion) into the stock market through newly-created monetary policy tools.

Supporting crude prices were figures from Energy Information Administration (EIA) which showed oil, gasoline and distillate inventories fell last week.

U.S. retail sales increased slightly more than expected in September, with investors still pricing in a 92% chance of a Federal Reserve rate cut in November.

“Positive U.S. economic data has helped alleviate some growth concerns, but market participants continue to monitor potential demand recovery in China following recent stimulus measures,” said Hani Abuagla, senior market analyst at XTB MENA.

Markets, however, remained concerned about possible price spikes given simmering Middle East tensions, with Lebanon’s Hezbollah militant group saying on Friday it was moving to a new and escalating phase in its war against Israel after the killing of Hamas leader Yahya Sinwar.

“Although the U.S. would like to believe that the killing of the leader is an opportunity to resume serious and meaningful peace talks, it seems more like a wishful thinking than a realistic alternative,” said Tamas Varga, an analyst with oil broker PVM.

Commodities

Oil prices flat as investors await US inventory data

Published

1 day ago

October 17, 2024

LONDON (Reuters) -Oil prices were broadly flat on Thursday as investors waited on developments in the Middle East, the release of official U.S. oil inventory data and details on China’s stimulus plans.

futures were up 25 cents to $74.47 a barrel at 0834 GMT, while U.S. West Texas Intermediate crude futures were at $70.64 a barrel, also up 25 cents.

Both benchmarks settled down on Wednesday, closing at their lowest levels since Oct. 2 for a second day in a row, after OPEC and the International Energy Agency cut demand forecasts for 2024 and 2025.

Prices have also fallen as fears eased that a retaliatory attack by Israel on Iran for the latter’s Oct. 1 missile strike could disrupt oil supplies, though uncertainty remains over how the conflict in the Middle East will develop.

“The country’s forthcoming retaliatory measures against Iran are still not clear,” said John Evans of oil broker PVM.

He added that the Middle East “will certainly provide enough reason to move oil prices again soon enough and investors today will also be preoccupied with an abundance of financial data”.

Among that data are U.S. oil inventories. The Energy Information Administration (EIA) will release its official government data at 11 a.m. EDT (1500 GMT).

The American Petroleum Institute’s Wednesday figures showed crude and fuel stocks fell last week, market sources said, against expectations of a build-up in crude stockpiles. [EIA/S]

“Any signs of weak demand in EIA’s weekly inventory report could put further downward pressure on oil prices,” ANZ analysts said.

PVM’s Evans also cited Thursday’s U.S. jobless claims data at 8.30 a.m. EDT (1230 GMT) and a rate decision from the European Central Bank.

That decision may support oil prices if the bank goes ahead with lowering interest rates again, the first back-to-back rate cut in 13 years, as it shifts focus from cooling inflation to protecting economic growth.

Investors are also waiting for further details from Beijing on broad plans announced on Oct. 12 to revive its ailing economy, including efforts to shore up its ailing property market.