Oil rates edge up after 2 consecutive sessions of decline
Date
8/29/2024 4:44:09 AM
(MENAFN) Oil prices edged up on Thursday after two consecutive sessions of decline, driven by renewed concerns over potential supply disruptions from Libya. However, the gains were somewhat tempered by a smaller-than-anticipated reduction in U.S. crude inventories, which dampened expectations for demand. As of 0355 GMT, brent crude futures increased by 9 cents, or 0.11 percent, to reach USD78.74 per barrel, while U.S. West Texas Intermediate (WTI) crude futures rose by 15 cents, or 0.2 percent, to USD74.67 per barrel.
The previous day, both Brent and WTI crude experienced declines of over 1 percent following the release of U.S. inventory data, which revealed that crude stockpiles had dropped by 846,000 barrels to 425.2 million barrels for the week. This draw was significantly below analysts' predictions, who had expected a reduction of 2.3 million barrels. The smaller draw raised concerns about demand, contributing to the earlier drop in oil prices.
Market analysts pointed out that the ongoing geopolitical instability in Libya is contributing to the upward pressure on prices. Libya, an OPEC member, is facing internal struggles, particularly concerning control of its central bank, which has led to the shutdown of several oil fields. A consulting firm has projected that this disruption could result in a reduction of up to 1 million barrels per day in production, potentially lasting several weeks. In July, Libya’s production was reported at approximately 1.18 million barrels per day.
The potential for a prolonged disruption in Libya's oil output may influence OPEC+ production strategies for October, which could further support oil prices if the supply does not decrease as previously anticipated. Additionally, oil markets found some support from expectations that the U.S. might begin cutting interest rates next month. This sentiment was echoed by Atlanta Federal Reserve President Raphael Bostic, who suggested that with inflation continuing to decline and unemployment rising more than expected, it might be an appropriate time to lower rates.
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