Oil prices rise 1% amid US storm concerns and Israel-Iran tensions
OIL & GAS

Oil prices rise 1% amid US storm concerns and Israel-Iran tensions

Oil prices experienced an increase of over 1 per cent, driven by a surge in fuel demand as a major storm approached Florida and amid on-going concerns regarding Middle Eastern supply risks.

Brent crude futures rose by $1.01, or 1.3 per cent, reaching $77.59 a barrel by 1108 GMT. Similarly, U.S. West Texas Intermediate (WTI) futures climbed by $1, or 1.4 per cent, to $74.24.

In the United States, the largest oil producer and consumer, Hurricane Milton made landfall in Florida, leading to the sale of gasoline at approximately a quarter of fuel stations, which helped support crude prices.

Prices spiked earlier in the month following Iran's launch of over 180 missiles targeting Israel on October 1, raising concerns about potential retaliation against Iranian oil facilities. Despite Israel's lack of response, crude benchmarks eased again, remaining relatively stable throughout the week.

Investors remained cautious, particularly since Israeli Defence Minister Yoav Gallant had assured that any strike against Iran would be "lethal, precise and surprising." US President Joe Biden had discussions with Israeli Prime Minister Benjamin Netanyahu regarding Israel's plans concerning Iran. However, analysts from ANZ noted a growing concern that Israel's allies might have limited influence over its strategy.

Even with the heightened tensions in the oil-producing Middle Eastern region, demand concerns continued to shape the fundamental outlook. Tamas Varga, an analyst at oil broker PVM, commented that without a significant demand excess or supply shortage, the risk would remain tilted toward the downside. He suggested that even if Israel's aggressive rhetoric translated into an attack on Iranian oil infrastructure, any price reaction could be brief yet intense.

Additionally, the U.S. Energy Information Administration (EIA) downgraded its demand forecast for 2025 due to weakening economic activity in China and North America. EIA data released on Wednesday indicated that crude inventories had built more than analysts had anticipated in a Reuters poll.

Oil prices experienced an increase of over 1 per cent, driven by a surge in fuel demand as a major storm approached Florida and amid on-going concerns regarding Middle Eastern supply risks. Brent crude futures rose by $1.01, or 1.3 per cent, reaching $77.59 a barrel by 1108 GMT. Similarly, U.S. West Texas Intermediate (WTI) futures climbed by $1, or 1.4 per cent, to $74.24. In the United States, the largest oil producer and consumer, Hurricane Milton made landfall in Florida, leading to the sale of gasoline at approximately a quarter of fuel stations, which helped support crude prices. Prices spiked earlier in the month following Iran's launch of over 180 missiles targeting Israel on October 1, raising concerns about potential retaliation against Iranian oil facilities. Despite Israel's lack of response, crude benchmarks eased again, remaining relatively stable throughout the week. Investors remained cautious, particularly since Israeli Defence Minister Yoav Gallant had assured that any strike against Iran would be lethal, precise and surprising. US President Joe Biden had discussions with Israeli Prime Minister Benjamin Netanyahu regarding Israel's plans concerning Iran. However, analysts from ANZ noted a growing concern that Israel's allies might have limited influence over its strategy. Even with the heightened tensions in the oil-producing Middle Eastern region, demand concerns continued to shape the fundamental outlook. Tamas Varga, an analyst at oil broker PVM, commented that without a significant demand excess or supply shortage, the risk would remain tilted toward the downside. He suggested that even if Israel's aggressive rhetoric translated into an attack on Iranian oil infrastructure, any price reaction could be brief yet intense. Additionally, the U.S. Energy Information Administration (EIA) downgraded its demand forecast for 2025 due to weakening economic activity in China and North America. EIA data released on Wednesday indicated that crude inventories had built more than analysts had anticipated in a Reuters poll.

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