Commodities

Oil heads for weekly gain as Middle East conflict rages unabated

Published

12 months ago

February 9, 2024

Oil heads for weekly gain as Middle East conflict rages unabated

By Robert Harvey

LONDON (Reuters) -Oil prices were on track for over 5% gains week-on-week on Friday, amid persistent tensions in the Middle East after Israel rejected a ceasefire offer from Hamas.

futures slipped 20 cents, or 0.25%, on the day to $81.43 a barrel by 1223 GMT, while U.S. West Texas Intermediate crude futures fell by 9 cents, or 0.12%, to $76.13 a barrel.

Israeli forces continued deadly air strikes on Gaza on Friday, after the bombing of Gaza’s southern border city of Rafah on Thursday helped send oil prices up by around 3% in the previous session.

“It takes two to tango to reach a ceasefire deal in the Middle East and tensions in the region have not gone away,” UBS analyst Giovanni Staunovo said.

Brent futures prices firmed to above $81 a barrel after Israeli Prime Minister Benjamin Netanyahu rejected a proposal to end the war in the Palestinian enclave on Wednesday.

“With the words that, ‘no part of the Gaza Strip would be immune from Israel’s offensive’, it was not hard for oil participants to conclude that without even a passing regard for peace, there was not enough conflict-premium priced in,” PVM analyst John Evans said.

Elsewhere, Ukraine launched drone attacks against two oil refineries in southern Russia on Friday, resulting in a fire at the Ilsky refinery. The Afipsky refinery, also in Krasnodar Krai which borders Crimea on the Black Sea and Azov Sea coast, was the other facility in the attack.

Russia is exporting more crude in February than it planned under an OPEC+ deal, following a combination of drone attacks and technical outages at its refineries.

“Proof still needs to be provided that Russia is able to cut oil exports sufficiently even without weather-related constraints,” Commerzbank (ETR:) analyst Carsten Fritsch said on Friday in reference to the country’s OPEC+ cut quota.

Meanwhile, the U.S. Treasury Department on Thursday sanctioned another three entities based in the United Arab Emirates (UAE) and one tanker registered by Liberia for violating a cap placed on the price of Russian oil by a coalition of Western nations.

Commodities

Oil wavers as Trump’s Colombia sanctions threat rattles markets

Published

4 hours ago

January 27, 2025

Commodities

Kazakhstan’s daily oil output at record high amid Chevron-led expansion

Published

4 hours ago

January 27, 2025

Commodities

US oil and gas rig count falls to lowest since Dec 2021, Baker Hughes says

Published

1 day ago

January 26, 2025

By Scott DiSavino

(Reuters) – U.S. energy firms this week cut the number of oil and rigs operating for a third week in a row to the lowest since December 2021, energy services firm Baker Hughes (NASDAQ:) said in its closely followed report on Friday.

The oil and gas rig count, an early indicator of future output, fell by four to 576 in the week to Jan. 24.

Baker Hughes said this week’s decline puts the total rig count down 45, or 7% below this time last year.

Baker Hughes said oil rigs fell by six to 472 this week, their lowest since December 2021, while gas rigs rose by one to 99.

In the Permian Basin in West Texas and eastern New Mexico, the nation’s biggest oil-producing shale basin, the rig count fell by six in the week to 298, the lowest since February 2022.

That six-rig decline in the Permian was the biggest weekly drop since August 2023.

The oil and gas rig count declined by about 5% in 2024 and 20% in 2023 as lower U.S. oil and gas prices over the past couple of years prompted energy firms to focus more on paying down debt and boosting shareholder returns rather than raising output.

Even though analysts forecast U.S. spot crude prices could decline for a third year in a row in 2025, the U.S. Energy Information Administration (EIA) projected crude output would rise from a record 13.2 million barrels per day (bpd) in 2024 to around 13.6 million bpd in 2025.

On the gas side, the EIA projected a 43% increase in spot gas prices in 2025 would prompt producers to boost drilling activity this year after a 14% price drop in 2024 caused several energy firms to cut output for the first time since the COVID-19 pandemic reduced demand for the fuel in 2020. [NGAS/POLL]

The EIA projected gas output would rise to 104.5 billion cubic feet per day (bcfd) in 2025, up from 103.1 bcfd in 2024 and a record 103.6 bcfd in 2023.