Oil prices experience modest rebound following sharp decline
Date
10/29/2024 6:44:11 AM
(MENAFN) On Tuesday, oil prices experienced a modest rebound following a sharp decline in the previous trading day. This uptick was supported by the U.S. government's recent plan to procure oil for its strategic reserves, as investors remained focused on the evolving situation in the Middle East.
As of 0025 GMT, brent crude futures increased by 44 cents, or 0.6%, reaching $71.86 per barrel. Likewise, West Texas Intermediate (WTI) crude saw a rise of 45 cents, or 0.7%, settling at $67.83 per barrel. This recovery comes after benchmark crude futures dropped by six percent on Monday, which marked the lowest level since October 1, largely due to Israel's airstrike targeting Iranian oil facilities over the weekend.
The U.S. administration has announced plans to acquire up to three million barrels of oil for its strategic reserve, with deliveries anticipated by May next year. This purchasing initiative may restrict the government’s ability to procure additional oil until Congress approves further funding.
Hiroyuki Kikukawa, the president of NS Trading—a subsidiary of Nissan Securities—commented on the market dynamics, noting that while there are significant concerns regarding tensions in the Middle East, there is a belief that retaliatory strikes between Israel and Iran may temporarily subside. He pointed out that the U.S. initiative to bolster its strategic reserves has offered some support to the market. However, he also warned of a potential downward trend in oil prices as the peak demand season for kerosene approaches in the Northern Hemisphere, coupled with a reduction in demand from China.
Over the weekend, the situation intensified when numerous warplanes conducted three waves of strikes against rocket production facilities and other sites near Tehran, marking the latest in a series of exchanges between the two adversarial nations. As the geopolitical landscape remains fraught with tension, market analysts and participants are keeping a close watch on these developments, which could significantly affect oil prices in the near term.
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