Oil prices rose more than a dollar yesterday after falling in the previous session, with markets balancing tension in the Middle East amid concerns about demand and increased OPEC supplies.
Brent crude futures rose $1.73, or 2.27%, to $77.85 per barrel, while US West Texas Intermediate crude futures rose $1.66, or 2.35%, to $72.43 per barrel, reports Al-Anba daily.
Analysts said that geopolitical tension in the Middle East and the ongoing supply outages in Libya supported the rise in prices yesterday.
Suvro Sarkar, head of the energy sector team at DBS Bank, said: On the supply side, there are some positive factors from the closure of the largest oil field in Libya, which affected about 0.3 million barrels per day of oil production.
Some major shipping companies are still avoiding the Red Sea, and the German company Hapag-Lloyd said yesterday that it will continue to divert ships around the Cape of Good Hope route in the wake of naval attacks launched by the Houthis.
Regarding the Gaza war, the Israeli army said that its fight against Hamas will continue through 2024, which raised markets’ concerns about the conflict developing into a regional crisis that could disrupt oil supplies in the Middle East.
Oil prices rebounded from the losses they incurred last Monday by 3% and 4%, respectively, after Saudi Arabia sharply reduced official selling prices.
On the demand side, German industrial production unexpectedly fell in November according to the Federal Statistics Office, recording a decline for the sixth month in a row.
Production fell 0.7% after analysts polled by Reuters expected a 0.2% rise.
In the United States, Federal Reserve Board of Governors member Michelle Bowman said she now sees US monetary policy as “sufficiently restrictive” and indicated her willingness to support eventual cuts in interest rates as inflation declines.