Commodities

Oil prices set for 10% weekly rise as Middle East tensions heat up

Published

2 weeks ago

October 4, 2024

By Ahmad Ghaddar and Arunima Kumar

LONDON (Reuters) -Oil prices rose sharply on Friday, and were on track for 10% weekly gains as investors weighed the prospect of a wider Middle East conflict disrupting crude flows after President Biden said the US was discussing an Israeli attack on Iranian oil facilities.

futures were up $1.09, or 1.4%, at $78.71 a barrel, as of 1120 GMT. U.S. West Texas Intermediate crude futures were up $1.08, also 1.5%, at $74.79 a barrel.

“While Iran has ‘saved face’ by its rocket attack on Israel on Tuesday, fears are growing that Israel might target Iranian oil infrastructure under its response, which could provoke further retaliation dragging neighbouring states into the conflict,” Panmure Gordon analyst Ashley Kelty said.

The U.S. is discussing whether it would support Israel strikes on Iran’s oil facilities as retaliation for Tehran’s missile attack on Israel, President Joe Biden said on Thursday, while Israel’s military hit Beirut with new airstrikes in its battle against Lebanese armed group Hezbollah. Biden said later in the day on Thursday he would not negotiate in public when asked if he had urged Israel not to attack Iran’s oil facilities.

Biden’s comments contributed to a 5% rally in oil prices on Thursday, as Israel weighs its options after arch-foe Iran launched its largest-ever assault on Tuesday.

“The market had already had a substantial amount of short positioning and low amounts of net length in the market – leaving the market prone to price spikes higher,” StoneX analyst Alex Hodes said.

Concerns over oil supply that drove up prices earlier in the week have also been tempered by OPEC’s spare production capacity and the fact that global crude supplies have yet to be disrupted by the Middle East unrest.

Meanwhile, Libya’s eastern-based government and Tripoli-based National Oil Corp announced on Thursday the reopening of all oilfields and export terminals after a dispute over leadership of the central bank was resolved, ending a crisis that had heavily reduced oil production.

This would allow the country to more than double its production levels, restoring them to about 1.2 million bpd.

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.