Oil Increases More Than $1 on Iran Attack Report
2024-11-01
Summary:
Oil prices rose over $1 a barrel on Friday, reducing weekly losses amid rising Middle East tensions from reports of Iran's planned strike on Israel.
Oil prices extended gains on Friday, climbing more than $1 a barrel to pare weekly losses, as geopolitical tensions in the Middle East rose following reports that Iran was preparing a retaliatory strike on Israel from Iraq.
US gasoline stockpiles have fallen to a two-year low, driven by strong demand, according to the EIA. Crude inventories also saw an unexpected drop due to reduced imports, even as shale output continues to rise.
In China, there's a bit of good news: manufacturing activity has expanded for the first time in six months, and services are improving as well, signaling that Beijing's recent stimulus measures might be helping the economy bounce back. However, consumer spending in China has been weak for four straight months, leading to the slowest growth in global oil demand since the pandemic in 2020, according to the IEA. The uncertainty surrounding the upcoming US elections is adding to the concerns.
Traders and analysts surveyed by Bloomberg are skeptical about OPEC+ sticking to its plans to increase production in December, given the shaky economic outlook. Citigroup and JPMorgan Chase warn that oil prices could drop into the $60s next year, especially if OPEC+ decides to boost supply. RBC suggests that Saudi Arabia might even speed up its plans for increasing production.
WTI crude rallied above $70, but still firmly pressed by 50 SMA. If the resistance persists, the price will likely fall below $67 again in the upcoming sessions.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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