The price of a barrel of Brent crude, which rose to $77.82 yesterday, ended the day at $76.48, down 0.01 percent compared to the close at 09.25 to $76.47, while West Texas Intermediate crude was sold at $73.22 per barrel.
Possible signs of contraction in the physical market had an impact on prices, and following the increasing tension in the Middle East, where the majority of the world’s oil reserves are located, the possibility of conflicts spreading to a wider region has led to concerns about supply in oil markets.
Following the Israeli airstrike on senior Hezbollah commander Fuad Shukor in Beirut, the capital of Lebanon, and the assassination of Hamas political bureau chief Ismail Haniyeh in Tehran, tensions have escalated in the region, and there have been threats of retaliation against Tel Aviv by Iran and the Lebanese Hezbollah, which held Israel responsible for the assassination of Haniyeh.
News of a production shutdown at Libya’s largest oil field has also heightened supply concerns in the markets. The Sharara oil field in southern Libya produces nearly a third of the country’s output with a daily oil production capacity of around 300,000 barrels.
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The US Energy Information Administration (EIA) noted in its “August 2024 Short-Term Energy Outlook” that global oil inventories fell by about 400,000 barrels per day in the first half of the year, and estimated that inventories would fall by about 800,000 barrels per day in the second half of the year.
On the other hand, expectations of an increase in commercial crude oil inventories in the United States, the world’s largest oil consumer, have led to the perception that demand in the country has weakened.
The American Petroleum Institute (API) forecast that US commercial crude oil inventories rose by 180,000 barrels last week compared to the previous week.
The data indicates that the decline in travel as the summer season approaches its end is causing a decrease in fuel demand.
The US Energy Information Administration will release official inventory data later today, and if the data shows that inventories are rising, prices are expected to head lower.
Fears of a recession in the US continue to fuel concerns about demand and pressure prices in oil markets.
It is worth noting that technically for Brent crude, the range between $77.43 and $79.64 can be considered resistance, and the range between $75.22 and $73.01 can be considered support.
