Oil prices witnessed little change in early Asian trading today, hovering near their highest levels in 3 weeks due to escalating tension in the Middle East and the recovery of Chinese demand.
Brent crude futures fell 8 cents to $83.48 a barrel. US West Texas Intermediate crude for April delivery fell 10 cents to $78.36 a barrel. The March West Texas Intermediate crude contract rose 26 cents to $79.45 a barrel, with traders preparing for this contract to expire during the day.
The price of a barrel of Kuwaiti oil rose 20 cents to reach $82.53 per barrel in yesterday’s trading, compared to $82.33 in last Friday’s trading, as per the price announced by the Kuwait Petroleum Corporation. Tony Sycamore, a market analyst at IG, said in a note that crude oil markets were “slightly lower” in “quiet trading during the Presidents’ Day holiday in the United States, and with demand concerns outweighing the ongoing geopolitical tension in the Middle East.”
The Iran-aligned Houthis continued their attacks on shipping lanes in the Red Sea and the Bab al-Mandab Strait, where at least four other ships have been hit by drones and missiles since Friday.
The Houthis said one of them, the Belize-flagged, British-registered and Lebanese-operated cargo ship Rubimare, was at risk of sinking in the Gulf of Aden, raising the stakes in their campaign to disrupt global shipping in solidarity with Palestinians in Gaza.
“Signs of strong demand in China also boosted sentiment,” ANZ analysts wrote in a note. Tourism revenues in China rose 47.3 percent year-on-year and exceeded pre-Covid-19 levels during the Lunar New Year holiday, which ended on Saturday. China also lowered its benchmark interest rate for real estate loans by more than expected today, in an attempt to support the real estate market and economy. However, price supportive factors did not fully offset demand concerns.
Last week, the International Energy Agency’s report revised downward its oil demand growth forecast for 2024 amid expectations that renewable energy will replace fossil fuels. Secretary-General of the Organization of Petroleum Exporting Countries (OPEC), Haitham Al-Ghais, confirmed that the organization seeks to establish stability in global oil markets and does not target any prices.
Al-Ghais said in an interview with KUNA yesterday evening during the launch of the activities of the Egypt International Energy Conference and Exhibition (EGYPS 2024) that “oil prices are determined by the global market, and the ultimate goal of OPEC is to balance supply with demand, which contributes to the stability of markets and growth in investments, and this contributes to “its role in strengthening the world economy in general.”
Al-Ghais believed that the world would need more investments in the fields of oil and gas, which it relied on during previous years, with emphasis on the importance of reducing emissions from oil and gas, stressing that countries of the world will not be able to rely on renewable energy alone.
“There will be growth in renewable energy,” he said, noting that Egypt is one of the pioneering countries in developing renewable energy and the gas industry, and one of the largest producers, especially after new discoveries in recent years.
