Oil surges for third day, set to snap 7-week losing streak

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ISLAMABAD: Crude oil prices extended gains of previous two sessions on Friday amid demand optimism and rising geopolitical risk, and were on course to break a seven-week losing streak. As of 1250 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $0.50 (+0.77 percent) to reach $77.20 a barrel. The West Texas Intermediate (WTI), the main oil benchmark for North America, went up by $0.62 (+0.87 percent) to $72.20 a barrel. Brent ended the last week at $75.84 a barrel and WTI closed the week at $71.23. The last time WTI booked a seven-week losing streak was five years ago. Similarly, the price of Russian Sokol on Friday increased by $2.10 (+3.04 percent) to $71.22. Arab Light prices witnessed an increase of $2.08 (+2.69 percent) to reach $79.55 a barrel. On the other hand, the price for Opec Basket went down to $73.91 a barrel with a dip of $3.15 (-4.09 percent). The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey. TLTP
Oil prices may see a bit of a demand pull due to improved liquidity conditions after the Federal Reserve’s dovish pivot. The International Energy Agency, meanwhile, did an inadvertent favour to OPEC with its latest monthly report, in which it said oil demand was going to expand more than previously expected in 2024.
Meanwhile, one of the largest tanker companies, Maersk Tankers, has told its fuel carrier crews that they can bypass the Red Sea from now amid a series of missile and drone attacks on vessels in the area from the Yemeni coast. If carriers choose to bypass the Red Sea, it will also bypass the Suez Canal and add thousands of miles to their journeys, opting to sail around Africa instead. Even with the heightened geopolitical risk in the Middle East, the tensions between Venezuela and Guyana, and the bullish IEA report, oil prices have only registered modest gains.
The global oil consumption will rise by 1.1 million barrels per day (bpd) in 2024, the IEA said in a monthly report, up 130,000 bpd from its previous forecast, citing an improvement in the outlook for the United States and lower oil prices. The 2024 estimate is less than half the forecast of the Organization of the Petroleum Exporting Countries (OPEC).
The prices were also boosted by a larger-than-expected draw from the US crude inventory. The US Energy Information Administration (EIA) said energy firms withdrew a bigger-than-expected 4.3 million barrels of crude from stockpiles in the week ended Dec. 8 as imports fell.