Oil inches up on Middle East tensions despite US demand worries

WORLD  28 June 2024 - 07:04

CNBC carries an article about oil prices which slightly increased due to concerns over supply disruptions, Caliber.Az reprints the article.

On June 27, oil prices rose as concerns over potential supply disruptions due to escalating geopolitical tensions in the Middle East offset worries about demand following an unexpected increase in US stockpiles.

Brent crude futures climbed 76 cents, or 0.9 per cent, to $86.01 a barrel by 0930 GMT, while US West Texas Intermediate crude futures gained 69 cents, or 0.9 per cent, to $81.60.

Both benchmarks had ended slightly higher on June 26.

According to the US Energy Information Administration (EIA), crude oil stocks in the country increased by 3.6 million barrels last week.

Analysts surveyed by Reuters had anticipated a decrease of 2.9 million barrels. Additionally, US gasoline stocks saw a rise of 2.7 million barrels, contrasting with analyst forecasts of a 1 million barrel decline.

"The actual figures were a disappointment for bullish investors expecting ongoing market tightening due to seasonal demand," stated PVM Oil analyst John Evans.

“If it weren't for the continuous and gradual increase in geopolitical risks in the Middle East, oil prices could have faced a much more negative day," paraphrased the statement regarding geopolitical risks from the Middle East.”

Worries over the potential for the Israel-Hamas war in Gaza spreading to Lebanon limited price declines.

Tensions between Israel and Lebanon's Hezbollah have been intensifying recently, raising concerns of a potential conflict that could involve other regional powers, including Iran, a significant oil producer.

Panmure Gordon analyst Ashley Kelty mentioned that if escalation were to happen, it could potentially affect crude oil supplies from the Middle East.

Turkish President Tayyip Erdogan expressed solidarity with Lebanon and urged regional countries to offer their support. Meanwhile, Israeli forces conducted airstrikes in multiple locations across Gaza on June 26, with reports of intense overnight clashes in Rafah in the southern part of the Palestinian enclave.

Caliber.Az