
Oil Steady as Increased Supply Eases Middle East Conflict Concerns, Reports Reuters
Oil prices remained stable on Tuesday as the anticipation of additional supply entering the market, amidst weak global demand growth, balanced out concerns over potential disruptions to exports due to escalating conflicts in the Middle East.
Brent crude futures for December delivery rose by 13 cents, or 0.18%, reaching $71.83 a barrel at 0050 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures for November delivery increased by 11 cents, or 0.16%, settling at $68.28 a barrel.
The oil market has faced pressure this year from lower-than-expected demand growth, particularly from China, the world’s largest importer of crude oil. This concern was heightened on Monday when data indicated that China’s manufacturing activity contracted for a fifth consecutive month in September.
In September, Brent futures concluded the month down by 9%, marking its third consecutive month of declines and the largest monthly decrease since November 2022. In the third quarter, Brent dropped 17%, signifying its largest quarterly loss over the past year. WTI also experienced declines, falling by 7% last month and 16% for the quarter.
The rising tensions between Israel and the militant group Hezbollah in Lebanon raised concerns about Iran, a significant oil producer and OPEC member that supports Hezbollah, potentially becoming involved in the conflict. This could disrupt oil exports from the region.
The Israeli military has initiated targeted operations against Hezbollah positions in the southern Lebanese border area, as stated in a release early on Tuesday.
Despite these geopolitical tensions, major oil producers are expected to boost their output by the end of the year. Analysts from ANZ noted that crude oil prices remained relatively unchanged as traders assessed the situation amid heightened Middle Eastern tensions. They indicated that while the risk of supply disruptions persists, it is being countered by anticipated production increases from OPEC, and despite OPEC’s efforts to stabilize the market, prices continue to face downward pressure.
OPEC+, which includes OPEC members and allies like Russia, plans to raise output by 180,000 barrels per day in December.
Additionally, oil and fuel stockpiles are expected to have decreased by approximately 2.1 million barrels in the week ending September 27, based on a preliminary poll. This poll was conducted prior to an upcoming report from the American Petroleum Institute, set to be released later in the day.