Oil prices rose on Thursday, adding to strong gains in the previous session on ongoing concerns about supply in the Middle East following disruptions at the Sharara oil field in Libya and rising tensions around the Israel-Gaza war.
Brent crude rose 38 cents, or 0.5%, to $78.63 a barrel by 0440 GMT, while WestTexas Intermediate (WTI) futures rose 52 cents, or 0.7%, to $73.22 a barrel.
Both benchmarks rose nearly 3% on Wednesday, their first rise in five days, with WTI seeing its biggest daily percentage gain since mid-November.
Headlines about further tensions in the Red Sea and the complete closure of Libya’s Sharara oil field due to local protests have renewed concerns about disruptions in global oil supplies.
On Wednesday, local protests forced a complete shutdown of production at Libya’s Sharara oil field, which can produce up to 300,000 barrels daily. The field, one of Libya’s largest, is a frequent target of local and wider political protests.
Early Tuesday, Hamas’ deputy leader was killed in an attack in Beirut; It was the first attack to hit Lebanon’s capital after almost three months of fighting between the Israeli army and Iran-backed Hezbollah, which is confined to the border area.
Shipping concerns in the Red Sea flared after Iran-backed Houthis in Yemen targeted a container ship bound for Israel on Wednesday.
The market was also supported by data from the American Petroleum Institute (API) showing US crude oil inventories fell by 7.4 million barrels in the week ending December 29, twice the decline analysts expected.
Weekly data from the Energy Information Administration (EIA), the statistical arm of the US Department of Energy, will be released at 1600 GMT on Thursday, a one-day delay due to the New Year’s holiday on Monday.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) said on Wednesday that cooperation and dialogue within the OPEC+ producer alliance would continue, despite OPEC member Angola saying it would leave the bloc last month. It was announced that the group will hold a meeting on February 1 to review the implementation of the latest oil production cut.
Brent is expected to range between $70 and $90 per barrel in 2024, based on flexible OPEC+ supply, low recession risk, and opportunistic strategic oil reserve purchases by China and the United States. Geopolitical risk scenarios will continue to be a significant upside risk to the forecast.
