Oil prices rose in Asian trading on Wednesday, amid rising tensions in the Middle East, while falling demand limited gains.
Brent crude futures were up 47 cents, or 0.55%, at $76.92 a barrel at the time of writing, while U.S. West Texas Intermediate crude was up 45 cents, or 0.60%, at $73.64.
Yahya Sinwar
The Palestinian Islamic Resistance Movement (Hamas) announced yesterday the selection of Yahya Sinwar as head of its political bureau, succeeding Ismail Haniyeh, who was assassinated in the Iranian capital, Tehran, last week. Hamas accused Israel of assassinating him, but the latter has remained silent about the matter.
Chinese trade data supported the bearish view on demand, showing that daily crude oil imports in July fell to their lowest level since September 2022.
The broader recovery in prices came after they fell earlier in the trading session, following US data showing an unexpected increase in crude oil and gasoline inventories.
Market sources said – citing figures from the American Petroleum Institute yesterday – that US crude oil, gasoline and distillate inventories increased last week.
Gasoline stocks rose by 3.313 million barrels, compared with analysts’ expectations for a 1 million-barrel decrease, while distillate stocks rose by 1.217 million barrels, a larger-than-expected increase.
Iran has vowed revenge on Israel following the assassination of both Haniyeh in Tehran and Hezbollah military commander Fuad Shukr in Beirut, raising fears of a wider war in the Middle East.
Any escalation of the conflict in the Middle East “could increase the risk of supply disruption from the region,” said Daniel Hynes, an analyst at ANZ.
The decline in production at Libya’s Sharara oil field, which has a production capacity of 300,000 barrels per day, is also exacerbating concerns about supply shortages.
Global stocks
According to estimates from the US Energy Information Administration published yesterday, global oil inventories fell by about 400,000 barrels per day in the first half of the year. The administration expects inventories to fall by about 800,000 barrels per day in the second half.
China’s daily crude oil imports in July fell to their lowest since September 2022, Reuters records of customs data showed, as weak processing margins and lower fuel demand curbed operations at state-owned and independent refineries.
Data from the General Administration of Customs also revealed that the world’s largest buyer of crude oil brought in 42.34 million tonnes in July.
