Oil Prices Rise as Iran Plans to Hit Israel
Oil prices rose on Friday following reports that Iran is preparing to attack Israel from Iraqi territory in the coming days. The lingering uncertainties due to geopolitical tensions keep increasing supply risks, though there is also a downside to global demand due to Chinese lower imports.
Brent crude increased by 0.55% to $74.43 per barrel, while US benchmark West Texas Intermediate crude climbed to US$71.30. The retaliatory attack by Iran could happen before the U.S. presidential election on Nov. 5, Reuters reported, citing Axios, which cited two anonymous Israeli sources.
Expectations that the Organization of the Petroleum Exporting Countries and allied producers could delay a planned oil output hike in December also provided support to oil prices, the report said, citing four unnamed sources.
A decision by the producer group, which is reportedly concerned about soft oil demand and rising supply, could be made as early as next week, the sources told Reuters.
Also, U.S. commercial crude oil stocks are expected to record a large increase of 6.7 million barrels in the next report week, Macquarie said in a Wednesday note.
Nominal implied supply is expected to be down by 0.3 million barrels per day (b/d), with net imports rising by 1.4 million b/d and the strategic petroleum reserve inventory gaining 1.1 million barrels, Macquarie said.
Macquarie projects a 2.1-million-barrel drop in gasoline inventories and a 3.2-million-barrel decrease in distillate stocks. Jet stocks are forecast to rise by 0.4 million barrels. This week, net imports were much lower than expected, falling 0.9 million b/d. implied domestic supply strengthened at 14.4 million b/d, Macquarie noted.
For gasoline, distillate and jet fuel, implied demand was slightly below expectation at 14.7 million b/d, according to Macquarie. The concern that global supply could be disrupted due to the ongoing war in the Middle East, where most of the oil resources are located, continues to support upward price movement.
Israel also continues to attack Beirut and Gaza in the Middle East, raising market players’ supply concerns. Israeli Prime Minister Benjamin Netanyahu, during his speech at the graduation ceremony held for Israeli soldiers on Thursday, noted that Israel does not have a set date to end the attacks on Gaza.
He added that Israel would continue the attacks until they reached their ‘goals’ in the region. Concerns that the ongoing turmoil in the Red Sea, which is of critical importance for oil and fuel shipments and global maritime trade, will negatively affect oil supply aided the rise in oil prices.
Iran-backed Houthis in Yemen have been seizing commercial ships known to be affiliated with Israeli companies off the coast of Yemen since Oct. 31, 2023, as a reaction to Israel’s attacks in Gaza.
Houthis also attacked some ships with unmanned aerial vehicles and missiles since the Israeli onslaught. In response to the hostile environment in the Red Sea, many shipping companies decided to avoid using that route. The Houthis announced that they have targeted 202 ships linked to Israel, the US, and the UK since November 2023. #Oil Prices Rise as Iran Plans to Hit Israel Naira Suffers Big, CBN Goes Ballistic Against FX WhalesThe post Oil Prices Rise as Iran Plans to Hit Israel appeared first on MarketForces Africa.