Oil prices rose today, Friday, as geopolitical tensions prevailed in the Middle East region as a result of the continued aggression against the Gaza Strip and tension in the Red Sea, in addition to disturbances in American oil production. Due to the cold weather, overcoming concerns about slowing demand growth in China.
By 0715 GMT, Brent crude futures rose two cents to $79.12 per barrel. US West Texas Intermediate crude futures also rose 13 cents to $74.21.
The two benchmarks rose about 2% yesterday, Thursday, with the International Energy Agency joining the Organization of the Petroleum Exporting Countries (OPEC) in its expectations of strong growth in global demand for oil, and the two crude oils are on their way to end the week higher by between 1% and 2%.
Yesterday, the International Energy Agency once again raised its forecast for global oil demand growth in 2024, although its numbers are still lower than OPEC’s expectations. She said the market appears well-supplied thanks to strong growth in non-OPEC countries.
The agency expects global oil supplies to rise to 1.5 million barrels per day to a new level of 103.5 million barrels per day in 2024, supported by record production from the United States, Brazil, Guyana and Canada.
Before that, OPEC expected that next year would witness a “strong” increase in oil consumption, led by China and the Middle East, and in its report it maintained its expectations of relatively strong growth in global demand for crude during 2024. It said that global demand for oil would rise to one million and 85 thousand barrels per day in 2025.
It also expected demand to grow by two million and 25 thousand barrels per day during the current year, which is the same forecast as last month, so that the total global demand for oil will reach 104.4 million barrels per day in 2024.
Middle East tensions
While the Israeli aggression on Gaza continues, and the crisis continues in the Red Sea, where the Yemeni Houthi group threatens to target Israeli and American ships crossing the Red Sea, Pakistan launched strikes on separatist militants inside Iran yesterday, Thursday, two days after Tehran announced that it had targeted the bases of another group inside Pakistani territory.
Hiroyuki Kikukawa, head of the NS Trading unit of Nissan Securities, said that in addition to the tensions in the Middle East, there are also fears that the US-Chinese conflict will gain attention again as the US elections approach, which will have a negative impact on energy demand.
He added, “Unless tensions in the Middle East escalate more quickly, WTI is likely to continue trading in a range between $70 and $76.”
Data from Vortexa, a consulting company, indicate that tanker traffic through the Bab al-Mandab Strait in the period from January 13 to 17 decreased by 58% compared to the same period in 2023.
The Houthis continued attacks on American ships yesterday, nearly a week after the United States and Britain launched strikes against the movement’s sites in Yemen.
Yesterday, the US Energy Information Administration announced a larger than expected decline in crude oil inventories, amounting to two million and 500 thousand barrels. Due to strong demand from refineries in the week ending January 12, gasoline and distillate stocks rose to their highest levels in several years.