“Prices may remain high or remain more volatile for a little while longer, but there is enough production, there is enough supply,” says CEO
Oil prices rose on Thursday as the prospect of a widening conflict in the Middle East that could disrupt crude flows from the region overshadowed a stronger global supply outlook, Reuters reports.
Brent crude futures LCOc1 rose $1.02, or 1.38%, to settle at $74.92 a barrel. U.S. West Texas Intermediate crude futures CLc1 added $1.10, or 1.57%, to $71.20.
“After initial concerns from geopolitical risks in the Middle East, we have seen some quiet recovery in global markets, but of course, with market participants still watching for any upcoming Israeli response”said Yeap Jun Rong, a strategic analyst at IG.
Israel bombed Beirut early Thursday, killing at least six people, as its forces faced their deadliest day on the Lebanese front in a year of clashes with Iran-backed Hezbollah.
Israeli Prime Minister Benjamin Netanyahu said Iran would pay for its missile attack on Israel on Tuesday, while Tehran said any retaliation would be met with “enormous destruction”, raising fears of a wider war.
Awaiting Israel’s response to Iran
“It’s a waiting game to see what the Israeli response will be which I suspect comes after the Rosh Hashanah holiday ends tomorrow,” said IG market analyst Tony Sycamore.
Meanwhile, U.S. crude inventories rose 3.9 million barrels to 417 million barrels in the week ended Sept. 27, according to the Energy Information Administration, compared with expectations in a Reuters poll for a 1.3 drop. million barrels.
“The surge in US inventories suggests the market is well stocked and can withstand any disruptions,” ANZ analysts said.
Some investors have been unaffected as global crude supplies have yet to be disrupted by turmoil in the key production region and OPEC’s overcapacity eased concerns.
“Prices may stay high or stay more volatile for a little while longer, but there’s enough production, there’s enough supply,” Jim Simpson, chief executive of East Daley Analytics, told Reuters.
OPEC has sufficient surplus oil to compensate for the complete loss of Iranian supply if Israel strikes that country’s facilities.
Source: Skai
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