Aug 8 2024: Oil prices fell in volatile trading on Thursday, poised to end a two-session streak of gains that saw prices rise approximately 3% amid concerns over supply risks related to Middle East tensions.
Brent crude futures decreased by 25 cents, or 0.3%, to $78.08 per barrel by 06:50 GMT, while U.S. West Texas Intermediate crude lost 13 cents, or 0.3%, settling at $75.10. Both benchmarks had initially recovered from near-2024 lows earlier in the day but later turned negative.
Market volatility has been influenced by the potential for supply disruptions following the recent killings of senior members of militant groups Hamas and Hezbollah, which raised fears of retaliatory actions from Iran against Israel. Despite these concerns, there has been no significant impact on supply thus far, although attacks on ships in the Red Sea have forced tankers to take longer routes.
Libya’s National Oil Corporation declared force majeure at its Sharara oilfield on Tuesday due to protests, which have led to a gradual reduction in the field’s production.
U.S. crude inventories fell by 3.7 million barrels, surpassing analyst expectations of a 700,000-barrel decline and marking the sixth consecutive weekly drop to six-month lows. This decline suggests robust demand for physical barrels despite concerns about weak economic activity.
Analysts at Citi noted potential for a price rebound to the low-to-mid-$80s range for Brent, citing factors such as tight market balances through August, heightened geopolitical risks in North Africa and the Middle East, possible weather-related disruptions during hurricane season, and light managed money positioning.
