Oil Prices Steady Amid Middle East Tensions and OPEC Supply Prospects
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Brent crude futures for December delivery increased by 13 cents, or 0.18%, to $71.83 a barrel as of 0050 GMT. U.S. West Texas Intermediate crude futures for November delivery gained 11 cents, or 0.16%, to $68.28 a barrel. MCX Crude oil prices opened at 5742.
Petroleum Price
- Oil prices were steady on Tuesday as the prospect of additional supply entering the market, amid lackluster global demand growth, offset concerns that the escalating Middle East conflict could disrupt exports from the key producing region.
- Brent crude futures for December delivery increased by 13 cents, or 0.18%, to $71.83 a barrel as of 0050 GMT. U.S. West Texas Intermediate crude futures for November delivery gained 11 cents, or 0.16%, to $68.28 a barrel. MCX Crude oil prices opened at 5742.
Petroleum Demand and Supply
- Oil markets have been under pressure from weaker-than-expected demand growth this year, particularly in China, which is world’s biggest crude importer. These demand concerns were reinforced on Monday after data showed that the country’s manufacturing activity shrank for a fifth consecutive month in September.
- On Monday, Brent futures ended September down 9%, marking its third month of declines and the largest monthly drop since November 2022. It slumped 17% in the third quarter, recording its biggest quarterly loss in a year. WTI fell 7% last month and dropped 16% for the quarter.
- Despite demand worries, escalating tensions between Israel and the Islamic militant group Hezbollah in Lebanon have increased the potential for Iran, a key oil producer and OPEC member that supports the militia, to be directly drawn into the conflict, potentially disrupting oil exports from the region.
- The Israeli military began limited, localized, and targeted raids against Hezbollah targets in the border area of southern Lebanon, it said in a statement early on Tuesday.
Petroleum News
- Crude oil was little changed as traders took stock of the outlook amid rising tensions in the Middle East.
- The risk of supply disruptions in the Middle East is being offset by the prospect of production hikes from OPEC. Despite its efforts to stabilize the oil market, prices have remained under pressure.
- OPEC+, which groups OPEC members and allies such as Russia, is scheduled to raise output by 180,000 barrels per day in December.
- U.S. crude oil and fuel stockpiles were expected to have fallen last week by about 2.1 million barrels in the week ending September 27, according to a preliminary Reuters poll on Monday.
- The poll was conducted ahead of a report from the American Petroleum Institute industry group, due at 4:30 p.m. EDT (2030 GMT) on Tuesday.
Expert Opinion
Market reports noted that the escalation of tensions between Israel and Hezbollah in West Asia may force Iran to directly participate in the conflict. Iran is a member of the Organization of the Petroleum Exporting Countries (OPEC). Market players believe that Iran’s direct participation could impact crude oil supplies from the region. However, the reported plans by OPEC+ to increase production output in the coming months limited the gains in crude prices. Market reports said that OPEC+ is scheduled to increase production output by 180,000 barrels a day in December.
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Goldman Sachs Warns of Oil Price Surge from Iranian Losses
Crude oil futures traded lower on Monday morning after witnessing their largest weekly gains last week due to escalating tensions in West Asia. December Brent oil futures were at $77.75, down by 0.38 percent, and November crude oil futures on WTI (West Texas Intermediate) were at $74.16, down by 0.30 percent.
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Middle East Tensions Push Oil Prices Higher Amid Stable Global Supply
Brent crude futures rose by 9 cents, or 0.12%, to $77.71 a barrel as of 0010 GMT. U.S. West Texas Intermediate (WTI) crude futures increased by 8 cents, or 0.11%, to $73.79 a barrel. MCX crude oil prices opened at Rs. 6192 with a gain of 0.50%.
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