Despite a slight dip on Friday, oil prices rose for a second straight week on tensions in the Middle East and fears of a widespread supply disruption.
Brent crude oil futures rise around 1.6%, to $79.04 a barrel while U.S. West Texas Intermediate crude futures was up around 1.6% to $75.56 per barrel in the week.
Israel’s possible retaliatory reaction to Iran’s October 1 missile attack and the increase in conflicts were among the effective factors in maintaining and increasing oil prices this week.
Meanwhile, Gulf states are lobbying Washington to stop Israel from attacking Iran’s oil sites, as they are worried that if the conflict escalates, their oil production and exports will be at risk.
In Yemen, the Houthis said they targeted vessels in the Red Sea and Indian Ocean. The Houthis have launched attacks on international shipping near Yemen since last November in solidarity with the Palestinian people in the Gaza Strip.
In the United States, Hurricane Milton plowed into the Atlantic Ocean on Thursday after cutting a destructive path across Florida, killing at least 10 people and knocking out power to more than 3.4 million homes and businesses. The destruction could dampen fuel consumption in some areas of the US. Delayed tanker truck deliveries and disrupted pipeline movement will likely be affecting supplies well into next week given broad based power outages,” analysts said.
On the supply side, Libya’s National Oil Corporation (NOC) said on Thursday it has restored production close to levels before the country’s central bank crisis. Libya’s production of crude oil and condensates has reached 1,133,133 barrels per day (bpd), the National Oil Corporation said on Tuesday, several days after output resumed in the OPEC member.
On the upward side of the market, we can point out the readiness of the Chinese government for the growth of oil demand in this country. In a move that could boost oil demand in the world’s second biggest oil consumer, China published a draft law aimed at promoting the development of the private sector, the country’s latest step to boost investor confidence amid an economic slowdown.
In the U.S., markets grew more confident the Federal Reserve would cut interest rates in November after data showed an increase in weekly jobless claims and an annual rise in inflation that was the lowest since February 2021. After hiking rates aggressively in 2022 and 2023 to tame a surge in inflation, the Fed started to lower interest rates in September. Lower interest rates lower borrowing costs for consumers and businesses, which can boost economic growth and demand for oil.
Crude oil inventories in the United States rose by a shocking 10.9 million barrels for the week ending October 4, according to The American Petroleum Institute (API). Analysts had expected a build of 1.95 million barrels.
Until the week ending October 11, the price of bitumen in most parts of Europe and the Middle East increased and in most parts of Asia, it decreased slightly or remained unchanged, compared to September.
The price of bitumen export cargoes in Italy, Spain, Rotterdam area and the Baltic Sea basin were $476/t, $499/t, $519/t and $507/t respectively, which show 22%, 21%, 17% and 13% growth.
South Korean export cargoes traded at $443/t, down about 2.2% from the end of September.
The price of exported bitumen in Taiwan, Thailand and Singapore was $465/t, $465/t and $468/t, respectively, which does not show much change compared to the end of September.
The FOB price of Iran’s export bulk bitumen was $309/t, which shows a growth of 7%.
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