LONDON: Oil prices remained stable on Thursday following two days of gains, with escalating supply risks in the Middle East balancing out concerns about demand that had previously pushed prices to their lowest levels since early 2024.
By 0903 GMT, Brent crude futures were down 16 cents, or 0.2%, at $78.17 per barrel. US West Texas Intermediate (WTI) crude fell 9 cents, or 0.12%, to $75.14 per barrel.
On Wednesday, Brent had risen 2.4% and WTI 2.8%, recovering from a significant drop earlier in the week when Brent hit its lowest point since early January and WTI since early February.
The price recovery was supported by a 3.7 million barrel decrease in US crude inventories, well above the anticipated draw of 700,000 barrels and marking a sixth consecutive weekly decline to six-month lows. ANZ analysts noted that this drop suggests robust demand for physical barrels despite weak economic activity concerns.
Prices also received a boost from heightened tensions in the Middle East and the declaration of force majeure on output at Libya’s Sharara oilfield. PVM analyst John Evans highlighted that recent violence involving Hamas and Hezbollah has raised the potential for retaliatory actions by Iran, increasing concerns over oil supply from this key region.
The market remains anxious as it awaits a response from Iran. Additionally, Libya’s National Oil Corporation has declared force majeure at the Sharara oilfield due to production reductions related to protests.
Citi analysts suggested that prices might rebound to the low to mid-$80s for Brent, noting that the market faces upside risks from tight balances, increased geopolitical tensions in North Africa and the Middle East, potential weather-related disruptions during hurricane season, and light managed money positioning.
