Oil prices fell on Thursday, reversing gains from the previous session after OPEC showed no sign of supporting Iran’s call for an oil embargo on Israel, and the United States planned to ease sanctions on Venezuela to increase the flow of oil globally.
December Brent futures fell 0.3%, or 29 cents, to $91.21 a barrel. West Texas Intermediate (WTI) November futures expiring Friday were nearly flat at $88.34 a barrel, up 2 cents.
The more active December WTI contract was down 0.2%, or 13 cents, at $87.14 a barrel at 06:45 GMT.
Oil prices rose nearly 2 percent in the previous session on concerns about disruptions in global supply after Iran called for an oil embargo on Israel due to the conflict in Gaza and as the United States, announced a larger-than-expected drop on oil stocks.
The Organization of Petroleum Exporting Countries eased concerns about possible disruptions by stating that it did not plan to take any immediate action in response to OPEC member Iran’s call.
Israel imports approximately 250,000 barrels per day (bpd) of oil, primarily from Kazakhstan, Azerbaijan, Iraq and African countries. It is unlikely that support for the embargo will come from Azerbaijan, a strong ally of Kazakhstan and Israel.
The fact that Biden’s visit to Israel ended without further tension in the Israel-Hamas conflict also caused a decline in prices. However, the market is still under upward pressure due to geopolitical tensions.
What actually factored was that the US issued a six-month license allowing transactions in the energy sector of OPEC member Venezuela, following an agreement between the Venezuelan government and the country’s political opposition to ensure fair 2024 elections.
Venezuela’s oil flow could help cushion global oil prices amid the Israel-Hamas conflict, sanctions on Russia, and OPEC+ decisions to cut production. However, Venezuela needs investments to heal production activities, which have eroded after years of sanctions.
Japan, the world’s fourth-largest buyer of crude oil, urged Saudi Arabia and other oil-producing countries on Thursday to increase their supply to stabilize the global oil market, on the grounds that rising fuel prices amid conflict could affect the global economy.
U.S. crude oil and fuel stocks fell last week due to rising demand for diesel and heating oil, according to data from the Energy Information Administration (EIA). Distillate fuel stocks fell by 3.2 million barrels in the week to 113.8 million barrels on October 13, according to EIA data.
Crude stocks decreased by 4.5 million barrels to 419.7 million barrels, and gasoline stocks decreased by 2.4 million barrels to 223.3 million barrels.
Supply could tighten further as November oil exports through Russia’s western ports are expected to fall by around 300,000 barrels per day and local refineries are expected to increase production once seasonal maintenance ends, sources said.
