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4 Jan, 2024 09:26

Oil extends gains on supply concerns

Crude prices had previously surged nearly 3% due to ongoing tensions in the Middle East and an outage in Libya
Oil extends gains on supply concerns

Global prices for crude oil increased on Thursday, stretching gains scored during the previous day as tensions around the Israel-Gaza military conflict continue to escalate, and protesters at the largest oil field in Libya ceased production.

Global benchmark Brent futures increased 0.42% to settle at $78.58 per barrel. The US benchmark West Texas Intermediate (WTI) crude rose 0.55% to $73.10 per barrel.

On Wednesday, both benchmarks soared some 3% to end higher for the first time in five days, with WTI recording the biggest daily percentage gain since the middle of November.

The surge came amid local protests that forced a complete halt to production at Sharara, one of Libya’s largest oil fields, which regularly produces up to 300,000 barrels per day.

Elsewhere, almost 100 people were killed and more than 200 injured by two explosions that ripped through a memorial marking the fourth anniversary of the death of Iranian General Qassem Soleimani in Iran’s south-central city of Kerman.

Oil prices have also been buoyed by mounting regional tensions from the ongoing Israel-Hamas war. On Tuesday, a drone strike in the Lebanese capital of Beirut killed Hamas deputy leader Saleh al-Arouri. Palestinian militants and local security sources have blamed the attack on Israel.

Concerns regarding shipping vessels in the Red Sea area also remain, as Yemen-based Houthi rebels continue to attack cargoes following the escalation of hostilities between Israel and Hamas in Gaza.

The market was also supported by data from the American Petroleum Institute showing that US crude stocks dropped 7.4 million barrels in the week ended December 29. However, gasoline inventories rose by about 6.9 million barrels, against forecasts for a 200,000-barrel drop, and distillate stockpiles rose more than expected.

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