Jan 19, 2024: Oil prices have inched higher, poised for weekly gains due to ongoing tensions in the Middle East and disruptions in U.S. oil output caused by severe winter weather. As of 09:05 ET (14:05 GMT), U.S. crude futures showed a 0.1% increase, reaching $74.05 per barrel, while the Brent contract climbed 0.1% to $79.21 a barrel. Both benchmarks are on track to achieve weekly gains exceeding 1%.
This week, the crude market has experienced upward momentum as heightened tensions in the Middle East compelled companies to reroute cargoes around Africa, resulting in extended journey times and increased costs. The ongoing clashes between U.S.-led forces and the Iran-backed Houthi group in the Red Sea, coupled with rising tensions between Iran and Pakistan, signal further instability in the oil-rich region.
Supporting prices was an unexpected decline in U.S. crude inventories. Additionally, severe cold weather has disrupted about 40% of oil output in North Dakota. However, travel limitations have led to a sustained, substantial build in oil product inventories.