Brent inches up amid escalations in the Middle East
The front-month ICE Brent contract has gained $0.07/bbl on the day, to trade at $74.41/bbl at 09.00 GMT.
PHOTO: Oil barrels. Getty Images
Upward pressure:
Brent crude’s price has inched up as supply concerns emerged amid escalations in the Middle East.
Israel has ramped up air assaults on southern Lebanon this week, according to the Israeli Defense Forces (IDF). “The IDF will continue to operate to eliminate the threats of Hezbollah,” it said on social media platform X (formerly Twitter).
The IDF has also reportedly eliminated Iran-aligned Hamas armed group’s prominent leader Yahya Sinwar, it said. This comes at a time when reports indicate that Israel has prepared plans for a potential strike on Iran. “There have been reports that Israel will launch its attack [on Iran] ahead of the US Presidential election,” Price Future Group’s senior market analyst Phil Flynn remarked.
Brent’s price also gained after the US Energy Information Administration (EIA) reported a decline in US crude stocks. Commercial crude oil inventories in the US dropped by 2.19 million bbls to touch 421 million bbls on 11 October, according to data from EIA.
A drop in US crude stocks indicates growth in oil demand, which can put upward pressure on Brent’s price. “Crude oil prices ended higher… as US oil inventories fell more than anticipated while Middle East tensions linger,” two analysts from ING Bank said.
Downward pressure:
Oil demand growth concerns from China have continued to cap Brent’s price gains.
Chinese crude oil imports declined in the previous month, to touch 11.07 million b/d, down from 11.56 million b/d imported in August.
The drop in crude imports has indicated a slowdown in oil demand growth in the world’s second-largest crude oil-consuming nation, according to market analysts. “Concerns over China demand continue to weigh [on oil prices],” analysts from Saxo Bank said.
By Aparupa Mazumder
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