Oil prices surge amid Middle East turmoil

2024-01-04

Summary:

Oil prices surged Thursday, driven by supply concerns amid disruptions in Libya and heightened Israel-Gaza war tension, extending a strong rally.

Oil prices rose in early trade on Thursday, extending its strong rally on concerns about Middle Eastern supply following disruptions at a field in Libya and heightened tension around the Israel-Gaza war.

Both benchmarks rose by around 3% to settle higher for the for the first time in five days on Wednesday. The ongoing Israel-Hamas war which was largely shrugged off by trader at the end of last year has begun to support oil prices anew.

On Wednesday, local protests forced a full shutdown of production at one of Libya's largest oilfields. Elsewhere nearly 100 people were killed in blasts at an event to commemorate commander Qassem Soleimani in Iran.

Data from the API showed US crude stocks fell by 7.4 million barrels in the week ended 29 Dec, doubling the drawdown that analysts polled by Reuters had expected.

OPEC said that cooperation and dialogue within the wider OPEC+ producer alliance will continue and, according to three sources, it plans to hold a meeting of JMMC in early Feb.

Analysts surveyed in the latest Reuters poll predicted international oil prices may stay near $80 in 2024 as subdued demand was expected to outweigh supply jitters amid geopolitical tensions.

XBRUSD

Brent crude remains well below its 200 SMA which will likely cap further rally going forward. For now, it exhibits a slight bullish bias after finding big support from the $75 area.

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