10/3/2024–|Last updated: 10/3/202408:09 PM (Mecca time)
Crude oil continued to rise in market trading on Thursday, as the market prepared for the possibility that Israel’s retaliation against Iran would include oil targets. Tehran targeted several Israeli areas with dozens of missiles last Tuesday evening.
US West Texas Intermediate crude rose today by 5.5%, approaching $74 a barrel, after US President Joe Biden responded, when asked whether he would support Israel in striking Iranian oil facilities, and said, “We are discussing that.”
Global benchmark Brent crude rose to nearly $77.
The oil market has been stunned by the recent crisis in the Middle East, which comes after a year of turmoil in the region, as Israel continues its aggression against the Gaza Strip and expands it to include Lebanon, and also launches attacks on Yemen, Syria and Iran.
Israeli Prime Minister Benjamin Netanyahu said that Iran would pay the price for its missile attack on Israel on Tuesday night, while Tehran said that any response would be met with “widespread destruction,” raising fears of the expansion of the war.
The Middle East region represents about a third of the global supply of crude oil, and traders are concerned that the recent escalation may affect flows if energy facilities are attacked or supply routes are closed, especially the Strait of Hormuz on the Arabian Gulf, as this strait is a major logistical point through which one-fifth of oil passes. Daily oil supply.
“The fact that energy infrastructure is now considered a potential target is not a huge surprise to the market, but hearing Biden’s comments on this matter brings the possibility closer to reality,” said Rebecca Babin, senior energy trader, adding that there was some skepticism about whether Israel would… It will indeed target oil facilities, largely due to the influence of the Biden administration, which is keen to keep oil prices stable weeks before the US presidential elections.
Analysts at Citigroup said in a note yesterday, Wednesday, that a major blow from Israel on Iran’s export capacity could lead to 1.5 million barrels of daily supplies being removed from the market.
Aside from the crisis in the Middle East, there are signs of abundant supplies. OPEC Plus plans to restore some of its closed capacity, as increases are scheduled to begin next December after a two-month delay.
In the United States, official data showed that crude inventories rose unexpectedly by 3.89 million barrels last week, the largest increase in about 5 months.
US data
Meanwhile, the US Energy Information Administration said that crude inventories in the United States rose by 3.9 million barrels to 417 million barrels in the week ending September 27, compared to expectations of a Reuters poll of a decline of 1.3 million barrels.
“The rise in US inventories added an indication that the market is well supplied and can withstand any disruptions,” analysts at ANZ Bank said in a note.
The Organization of the Petroleum Exporting Countries (OPEC) has enough spare oil capacity to fully compensate for the loss of Iranian supplies if Israel strikes this country’s facilities.
But traders fear that OPEC will face difficulties if Iran responds by striking facilities at its neighbors in the Gulf.
