Oil prices recover slightly amid persistent, geopolitical concerns, production risks
Date
8/28/2024 5:07:25 AM
(MENAFN) Oil prices experienced a modest increase in early trading on Wednesday, recovering slightly from a significant drop that had ended a three-day winning streak. Investors are closely monitoring potential risks that could affect oil production, particularly concerns about possible declines in output from Libya and the Middle East, alongside broader worries about global fuel demand.
Brent crude futures rose by 25 cents, or 0.31 percent, reaching USD79.80 per barrel by 0209 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures increased by 17 cents, or 0.23 percent, settling at USD75.70. This uptick follows a previous decline of over 2 percent on Tuesday, which interrupted a notable three-day rally where prices had risen more than 7 percent. The recent decline in refining profits has dampened the outlook for fuel demand, compounded by data indicating that global consumption growth is lagging behind expectations for the year.
Supporting the market, recent data revealed a decrease in U.S. crude and fuel inventories, which provided some upward momentum for oil prices. However, significant risks persist, particularly regarding potential supply disruptions from Libya. The country's oil production, which stands at approximately 1.2 million barrels per day, faces possible halts due to ongoing political disputes and escalating conflicts in the region, including tensions between Israel, militants in Lebanon, and Iranian forces.
Analysts at ANZ highlighted that geopolitical uncertainties continue to cast a shadow over the market, with several Libyan oil fields currently shut down due to disagreements over central bank leadership and oil revenue management. This situation underscores the ongoing volatility and risks facing global oil markets.
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