Oil prices are rising on Monday amid continued tensions in the Middle East.
The United States on Saturday launched a new strike on Yemen in response to the launch of a ballistic missile by the Yemeni Houthis at shipping lanes in the Red Sea. According to Western media, the strike hit a single target – a radar used by the Houthis.
On Friday, the United States and the United Kingdom launched a series of airstrikes on military facilities belonging to the Houthis in Yemen.
The cost of March futures for Brent crude oil on the London ICE Futures exchange as of 7:20 a.m. is $78.49 per barrel, which is $0.2 (0.26%) higher than at the close of the previous trading. On Friday, these contracts rose by $0.88 (1.1%) to $78.29 per barrel.
Futures for WTI for February in electronic trading on the New York Mercantile Exchange (NYMEX) have risen in price by this time by $0.12 (0.17%) to $72.8 per barrel. As a result of the previous trading, the value of these contracts increased by $0.66 (0.9%) to $72.68 per barrel.
On Friday, the rise in the price of Brent at one point exceeded 4%, but by the end of the session it was only 1.1%. Over the past week, Brent fell by 0.6%, while WTI fell by 1.5%.
Market fluctuations show that traders currently do not see any serious risks of a reduction in oil production in the Middle East and oil supplies from the region due to the current conflict, Bloomberg writes.
Currently, prices “do not include a geopolitical risk premium, so Brent could rise above $80 per barrel if the conflict in the Middle East continues to escalate,” said Rob Tammel, portfolio manager at Tortoise Capital Advisors, as quoted by Market Watch.
“Currently, events in the region do not affect the supply of oil on the world market,” said Warren Patterson, who is responsible for commodity strategy at ING Groep NV. – “In the absence of supply disruptions, the situation on the oil market remains comfortable, despite the Middle East tensions.
Oil prices are actively rising on Friday morning due to escalating tensions in the Middle East.
The price of March futures for Brent on the London ICE Futures exchange by 7:12 a.m. was $78.78 per barrel, which is $1.36 (1.76%) higher than at the close of the previous session. On Thursday, these contracts rose in price by $0.61 (0.8%) to $77.41 per barrel.
Quotations for February futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time increased by $1.34 (1.86%) to $73.36 per barrel. At the end of the previous session, they rose by $0.65 (0.9%) to $72.02 per barrel.
WTI crude has not fallen below the level of long-term support, which is around $70 per barrel, since the beginning of 2024, said Tyler Ritchie, editor of Sevens Report Research.
“The main reason is the geopolitical uncertainty surrounding the expanding conflict between Israel and Hamas, as well as related attacks by Iranian-backed Houthis on ships in the Red Sea,” he added.
Earlier this week, Yemeni Houthis reportedly launched a large-scale attack on ships with drones and missiles. The U.S. military repelled the attack, but shipping companies remain wary of sending their vessels through the Red Sea for security reasons.
In response, the U.S. and allied military launched a series of strikes against the Houthis in Yemen.
“Today, at my direction, the U.S. military, together with the United Kingdom and with the support of Australia, Bahrain, Canada, and the Netherlands, successfully struck a number of targets in Yemen that Houthi rebels are using to threaten freedom of navigation on one of the world’s most important waterways,” Biden said in a statement released by the White House.
He noted that the US strikes are “a direct response to unprecedented Houthi attacks on international shipping in the Red Sea.”
On Thursday, benchmark oil prices are rising after falling a day earlier due to data on the growth of oil and oil products stocks in the United States.
Quotations for March futures for Brent on the London ICE Futures exchange as of 7:00 CET are $77.14 per barrel, which is $0.34 (0.44%) higher than the level at the close of the last trading session. On Wednesday, these contracts fell by $0.79 (1%) to $76.80 per barrel.
February futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) in the morning rose in price by $0.27 (0.38%) to $71.64 per barrel. As a result of the previous trading, their quotes decreased by $0.87 (by 1.2%) and ended the day at $71.37 per barrel.
Commercial oil inventories in the United States last week increased by 1.338 million barrels, the Energy Department reported. Analysts on average had forecast a decline of 675 thousand barrels, according to Trading Economics.
Gasoline reserves jumped by 8.03 million barrels, distillate reserves – by 6.53 million barrels. Experts expected an increase of 2.49 million and 2.38 million barrels, respectively.
S&P Global Commodity respondents predicted an average decrease in oil reserves by 900 thousand barrels, as well as an increase in gasoline reserves by 4.9 million barrels and distillate reserves by 3.7 million barrels.
Meanwhile, the oil market is supported by attacks by Yemeni Houthis on ships in the Red Sea, MarketWatch reports. The fact that the incidents continue despite the actions of the US and UK navies in the region increases fears of a protracted conflict, forcing transport companies to look for workarounds to transport goods.
Another factor that puts upward pressure on prices is the suspension of oil production at Libya’s largest field, Sharara, with a capacity of 300 thousand barrels per day, due to political protests.
Oil prices are rising on Wednesday on the back of data from the American Petroleum Institute (API) showing another decline in US stockpiles.
According to API estimates, oil reserves in the United States fell by 5.215 million barrels in the week ended January 5.
The US Department of Energy will release its own data on energy reserves at 17:30 p.m. A week earlier, the decline in oil reserves in the country amounted to 5.5 million barrels.
The cost of March futures for Brent on the London ICE Futures exchange as of 7:15 a.m. was $77.9 per barrel, which is $0.31 (0.4%) higher than at the close of the previous trading. On Tuesday, these contracts rose by $1.47 (1.9%) to $77.59 per barrel.
February futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) have risen in price by this time by $0.38 (0.53%) to $72.62 per barrel. As a result of previous trading, the value of these contracts increased by $1.47 (2%) to $72.24 per barrel.
The oil market is also supported by attacks by Yemeni Houthis on ships in the Red Sea. The fact that the incidents continue despite the actions of the US and UK navies in the region increases fears of a protracted conflict, forcing transport companies to look for workarounds to transport goods.
Oil prices are falling on Monday after a steady rise on Friday and over the past week on fears that the escalating conflict in the Middle East will limit the supply of raw materials to the global market.
The decline in the oil market on Monday is facilitated by the information that Saudi Arabia will lower prices for all grades of oil for all regions in February. Prices for Asian buyers will be reduced by $2 per barrel, state-owned Saudi Aramco said on Sunday.
The cost of March futures for Brent crude oil on the London ICE Futures exchange as of 7:10 a.m. on Thursday amounted to $77.88 per barrel, which is $0.88 (1.12%) lower than at the close of the previous trading. On Friday, these contracts rose by $1.17 (1.5%) to $78.76 per barrel.
February futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) have fallen by $0.9 (1.22%) to $72.91 per barrel by this time. As a result of the previous trading, the value of these contracts increased by $1.62 (2.2%) to $73.81 per barrel.
Over the past week, Brent rose in price by 2.2%, WTI – by 3%, Market Watch notes.
Traders continue to monitor the situation in Libya, where oil production at the country’s largest field, Al-Sharara, has been suspended due to protests, as well as the situation in the Red Sea after a series of attacks by Yemeni Houthis on commercial vessels.
These factors continue to support the oil market, said Warren Patterson, who is responsible for commodity strategy at ING Groep NV.
“However, in the absence of an escalation of the situation in the Middle East, the potential for price growth is limited given the fairly good balance of supply and demand in the market in the first half of 2024,” the expert says.
Oil prices are rising on Thursday morning after a sharp rise in the previous session.
The price of March futures for Brent on the London ICE Futures exchange at 7:06 a.m. was $78.61 per barrel, which is $0.36 (0.46%) higher than at the close of the previous session. On Wednesday, these contracts jumped in price by $2.36 (3.1%) to $78.25 per barrel.
Quotations for February futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time increased by $0.49 (0.67%) to $73.19 per barrel. At the end of the previous session, they rose by $2.32 (3.3%) to $72.70 per barrel.
Oil jumped in price on the news of the deaths of more than a hundred people in explosions near the grave of General Qasem Soleimani in Iran on the anniversary of his death. Soleimani was the commander of the Al-Quds Force of the Islamic Revolutionary Guard Corps. Iran’s intelligence services called the explosions a targeted terrorist attack.
Meanwhile, oil production at Libya’s largest oil field, al-Sharara, has been suspended due to protests. The field produces about 300 thousand barrels of oil per day.
In addition, investors are assessing signals about changes in energy reserves in the United States. According to the American Petroleum Institute (API), in the week to December 29, US oil reserves fell by 7.42 million barrels, while the expected decline was 2.97 million barrels.
Official data from the US Department of Energy will be published at 18:00 on Thursday. Analysts surveyed by Trading Economics expect, on average, that these data will indicate a decrease in oil reserves by 3.73 million barrels.
