Oil prices were flat on Thursday after two sessions of gains. Rising supply risks in the Middle East offset demand concerns that earlier in the week drove prices to their lowest levels since early 2024, Reuters reports.
Brent crude prices rose on Wednesday, recovering from a sharp drop on Monday as Brent crude hit its lowest since early January and WTI crude hit its lowest since early February.
Prices were supported on Wednesday by a 3.7 million barrel drop in US crude inventories, which beat analysts’ expectations of a 700,000 barrel decline and marked the sixth consecutive weekly decline to six-month lows.
Brent crude futures fell 4 cents to $78.29 a barrel by 1309 GMT. US West Texas Intermediate crude fell 10 cents, or 0.1 per cent, to $75.33. Mazen Salhab, market strategist for BDSwiss, said:
Crude oil futures experienced volatility in reaction to a mix of economic concerns and rising geopolitical tensions. Weak US economic data, including poor job growth, have raised concerns about a possible recession in the US. Despite these economic fears, oil prices might find support on the back of tensions in the Middle East.
The killing of senior members of militant groups Hamas and Hezbollah last week raised the likelihood of retaliatory Iranian strikes on Israel, adding to concerns about oil supplies from the world’s largest producing region.
Also providing some support was Libya’s National Oil Corporation, which declared force majeure on its Sharara oilfield from Tuesday, it said in a statement, adding that the company had been gradually reducing production at the field due to the protests.
Citi analysts forecast that there is a possibility of a rebound in Brent crude oil prices to below $80. Citi said:
Upside risks in the market remain, from still-tight balances through August, heightened geopolitical risks across North Africa and the Middle East, the possibility of weather-related disruptions through hurricane season and light managed money positioning.
