Oil steady as falling US demand counters Mideast tension

Oil prices were little changed on Wednesday with waning demand hopes in the US, the world’s largest crude consumer, after increasing 2% in the previous session following Israeli army’s claim that it killed the head of Hezbollah’s Executive Council in an airstrike on southern Beirut earlier this month.

The international oil benchmark of Brent crude increased 0.03% to $75.31 per barrel at 10.48 am local time (0748 GMT), up from the previous session’s close of $75.28.

The US benchmark West Texas Intermediate also rose by 0.02% to $71.29 per barrel, compared to $71.27 at the prior session’s close.

Data from the American Petroleum Institute (API) released late on Tuesday showed an increase of 1.64 million barrels in US commercial crude oil inventories, more than market expectations of a 700,000 barrel rise.

The reserve build reflected market perceptions of falling domestic demand, supporting downward price movements.

Official figures from the Energy Information Administration (EIA) are scheduled for later in the day. If a rise in crude oil inventories is confirmed, it is likely to weigh on prices.

Israel’s increased attacks in the Middle East continue to influence the oil market.

On Tuesday, Israeli military confirmed that ‘Hisham Safieddine, Head of the Hezbollah Executive Council, and Ali Hussein Hazima, Commander of Hezbollah’s Intelligence Headquarters, were eliminated by the IDF (army), along with additional Hezbollah commanders,’ via a statement.

‘They were eliminated in a strike carried out approximately three weeks ago in the area of Dahieh,’ it added.

Oil prices began to climb after the army took responsibility for the killings.

‘Oil prices surged because traders aren’t buying the chances of a ceasefire and hence expect more escalation,’ Osama Rizvi, energy and economy analyst at the US-based market intelligence company Primary Vision, told Anadolu.

Data showing some positive economic activity in the US and China, the world’s biggest oil consumers, continue to limit further declines in oil prices.

‘Looking at the data from US economy there seems to be some bright spots such as a resurge in retail sales and fall in unemployment claims by 19,000,’ Rizvi said.

Referring to the stimulus measure in China, Rizvi said the stimulus measures produced some results as house viewing went up during National Holiday season, ‘but remains well below expectations.’

He said there is a downward trend in global markets as ‘data points from Eurozone and global manufacturing paints a worrisome picture of the global economy. Same has been wanted by IMF and other famous economists.’

• API
• EIA
• Global Economy
• IMF
• US