Crude oil futures inched higher on Thursday, breaking a four-day losing streak. The losses were driven by easing concerns about potential supply disruptions in the Middle East and expectations of an oil surplus in the coming year.
While Israel has so far refrained from retaliating against Iran, the situation remains volatile. “Things could change quickly,” said Aditya Saraswat, the Middle East research director at Rystad Energy.
Saraswat noted that, in the event of a wider regional conflict, the impact on oil and gas supplies could be significant. “A broader conflict between Iran and Israel could severely disrupt gas exports and delay oil development projects,” he added in a report on Thursday.
Thursday’s Energy Market Overview:
West Texas Intermediate (WTI): The November contract rose to $70.67 per barrel, gaining 28 cents, or 0.4%. So far this year, U.S. crude has dropped more than 1%.
Brent Crude: The December contract climbed to $74.45 per barrel, up 23 cents, or 0.31%. Year to date, the global benchmark has declined by over 3%.
RBOB Gasoline: The November contract increased to $2.0468 per gallon, a rise of 0.32%. Gasoline prices have fallen nearly 3% this year.
Natural Gas: The November contract dropped to $2.347 per thousand cubic feet, down 0.84%. Year to date, natural gas has declined by almost 7%.
Israel has reportedly informed the U.S. that it plans to avoid targeting Iran’s oil facilities, following Iran’s October 1 ballistic missile attack. The oil market saw a sharp selloff earlier in the week on reports that Israel’s strikes would focus on military targets rather than oil infrastructure.
However, Saraswat warned that any attack on Iran’s oil facilities could disrupt around 1.4 million barrels of production per day. In a worst-case scenario, if a full-scale war were to break out, Iran could block the Strait of Hormuz, threatening the supply of 12 million barrels per day. This would likely lead to a significant spike in oil prices.
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