Oil prices rose on Thursday amid strong demand data from the US Energy Information Administration (EIA), falling production from the Organization of Petroleum Exporting Countries (OPEC), which fuel supply concerns and ongoing conflicts in the Middle East contrary to ceasefire attempts.
International benchmark Brent crude traded at $85.58 per barrel at 10.41 a.m. local time (0721 GMT), up 0.59% from the closing price of $85.08 per barrel in the previous trading session.
American benchmark West Texas Intermediate (WTI) traded at $82.54 per barrel, a 0.54% rise from the previous session when it closed at $82.10 per barrel.
According to data released by the EIA late Wednesday, US commercial crude oil stocks decreased by around 3.4 million barrels to 445.1 million barrels, compared to the market’s estimate of a rise of around 700,000 barrels.
Over the same period, gasoline inventories fell by approximately 2 million barrels to 229.7 million barrels.
Official statistics from the EIA portrayed a positive demand outlook in the US, the world’s largest oil consumer, and supported upward price movements.
OPEC’s latest monthly oil market report showed a 80,000 barrels per day (bpd) drop in the organization’s crude oil production in June, which brought total output down to 26.57 million bpd.
Meanwhile, the organization also reported that the total daily crude oil production of the OPEC+ group, which consists of OPEC and some non-OPEC producing countries, fell by 125,000 barrels to 40.80 million bpd.
The data signaling low production levels fueled market players’ supply concerns and lent support to crude oil prices.
Meanwhile, conflict continues in the Middle East despite cease-fire talks in the region. Geopolitical tensions support further price rises by spreading supply fears among market players.
In solidarity with Palestinians in Gaza, Yemen’s Houthi group said late Tuesday that they targeted a total of three ships in the Arabian Sea and the Gulf of Aden using missiles and drones. The vessels included an American ship, an Israeli ship and a third ship whose identity remains undisclosed. The strikes occurred when the vessels violated a ban by the group on access to Israeli ports.
In light of these events, market players are becoming more concerned about supply since they believe that the violence in the region may hinder oil shipping routes and encourage additional price increases.
