ISLAMABAD
Crude oil futures remained on an upward trend on Monday after recording their largest seven-day gain in a month last week on supply risks from the Israel-Gaza war.
As of 1300 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $0.36 (+0.40 percent) to reach $91.25 a barrel. The West Texas Intermediate (WTI), the main oil benchmark for North America, went up by $0.42 (+0.48 percent) to $88.11 a barrel.
Similarly, the price of Russian Sokol increased by $3.30 (+4.11 percent) to $83.11. Arab Light prices witnessed an increase of $3.63 (+4.04 percent) to reach $93.49 a barrel. On the other hand, the price for Opec Basket remained stable at $89.89 a barrel.
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.
Traders are concerned about the Israel-Hamas war escalating into a broader regional conflict, potentially affecting crude supplies in an already tight market. Israel is preparing for a ground offensive into Gaza and has warned about 1.1 million people in the northern half of the strip to evacuate.
Saudi Arabia and Russia have reaffirmed their combined supply cut of 1.3 million barrels per day up to the end of the year. Meanwhile, the Opec+ alliance has enforced total production curbs of 3.66 million bpd, or about 3.7 per cent of global demand.
“The sharp sell-off in crude prices in early October has reinforced Saudi Arabia’s caution about unwinding its voluntary production cuts,” Energy Aspects said in a research note last week. “We expect these to remain in place until year-end, as announced, and still see the potential they will be extended further into early 2024 to limit seasonal stock builds,” the data and intelligence provider said. “We do not think Iranian oil production or exports are at risk of disruption due to the Israel-Hamas conflict,” it added.
Last week, Opec stuck to its forecast for oil demand growth for 2023 and 2024 and said it expected the global economy to grow at a faster pace this year. World oil demand will rise by 2.25 million bpd in 2024, compared with growth of 2.44 million bpd this year, the group said in its monthly oil market report. However, the International Energy Agency slashed its oil demand growth forecast for next year, citing a deteriorating economic climate.
