Oil little changed; geopolitics, demand concerns in focus

(Reuters) – Oil was little changed on Wednesday after a sharp drop in the previous session ended a three-day streak of gains, amid persistent concerns over both potential supply losses from the Middle East and North Africa and global fuel demand worries.

Brent crude futures were down 6 cents at $79.49 a barrel at 0527 GMT. U.S. West Texas Intermediate crude futures fell 4 cents to trade at $75.49.

Prices fell more than 2% on Tuesday, snapping a three-day streak of gains of more than 7%, as concerns about low refinery profit margins weighed on expectations for fuel demand amid data showing global consumption growth has been lower than forecasts.

While a decline in U.S. oil and fuel inventories last week supported prices, the potential loss of Libyan oil output and the possible expansion of the Israel-Gaza conflict to include Iranian-backed militants from Hezbollah in Lebanon remain the largest risks to oil markets.

“Geopolitical risks continue to hover over the market,” analysts at ANZ said in a note on Wednesday.

Several oilfields across Libya have halted output as closures spread, amid a dispute between rival government factions over control of the central bank and oil revenue. The dispute puts about 1.2 million barrels per day of production at risk.

There has still been no confirmation of any closures from the Tripoli-based government, or from the National Oil Corp (NOC), which is in charge of oil resources.

However, engineers at the southeastern Amal and Nafoora oilfields told Reuters production had been halted, while engineers at Abu Attifel, also in the east, said output was reduced.

In the Middle East, fighting continued in the Gaza Strip between Israel and Hamas militants, displacing Palestinians while there were few signs of a concrete breakthrough in ceasefire talks in Cairo. Over the weekend, Israel and Hezbollah bombarded each other with rockets and missiles across the Lebanese border.

“The exchange of fire between Israel and Hezbollah threatens to derail negotiations over a ceasefire. While both parties have said they have concluded military operations for now, the market is still wary of an outbreak,” ANZ said.

{{8849|U.S. crcrude oil inventories fell 3.407 million barrels in the week ended Aug. 23 last week, according to market sources citing American Petroleum Institute figures on Tuesday. Gasoline inventories fell by 1.863 million barrels, and distillates fell by 1.405 million barrels.

Later on Wednesday, weekly U.S. oil storage data is due from the U.S. Energy Information Administration (EIA).

This post is originally published on INVESTING.

  • Related Posts

    Kazakhstan votes on whether to build first nuclear plant

    ALMATY (Reuters) – Kazakhstan votes in a referendum on Sunday on whether to build its first nuclear power plant, an idea promoted by President Kassym-Jomart Tokayev’s government as the Central…

    Oil settles up, biggest weekly gains in over a year on Middle East war risk

    By Shariq Khan NEW YORK (Reuters) -Oil prices rose on Friday and settled with their biggest weekly gains in over a year on the mounting threat of a region-wide war…

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    You Missed

    Kazakhstan votes on whether to build first nuclear plant

    • October 6, 2024
    Kazakhstan votes on whether to build first nuclear plant

    Factors Driving Exchange Rates

    • October 5, 2024
    Factors Driving Exchange Rates

    How Central Bank Digital Currencies Could Transform Payments?

    • October 5, 2024
    How Central Bank Digital Currencies Could Transform Payments?

    The Essential Guide to Currency Pairs for Confident Forex Trading

    • October 5, 2024
    The Essential Guide to Currency Pairs for Confident Forex Trading

    Weekly Focus: Czechia Will not Regulate Prop Demo Accounts, Saxo Exits Hong Kong, and More

    • October 5, 2024
    Weekly Focus: Czechia Will not Regulate Prop Demo Accounts, Saxo Exits Hong Kong, and More

    Oil settles up, biggest weekly gains in over a year on Middle East war risk

    • October 4, 2024
    Oil settles up, biggest weekly gains in over a year on Middle East war risk