Oil prices increase due to US storm and concerns over Israel-Iran conflict
Shafaq News/ Oil prices rose onThursday underpinned by a spike in fuel demand as a major storm barreled intoFlorida and concerns about potential supply disruptions in the Middle East amidheightened tensions between Israel and major oil producer Iran.
Brent crude futures rose 63 cents,or 0.8%, to $77.21 a barrel, while the U.S. West Texas Intermediate (WTI)futures were up 63 cents, or 0.9%, at $73.87 a barrel at 0423 GMT.
The world's largest oil producer andconsumer has been hit by a second major storm, Hurricane Milton, which madelandfall on Florida's west coast, spawning tornadoes and threatening surges ofseawater.
The storm has already driven updemand for gasoline in the state, with about a quarter of fuel stations sellingout of supplies, which has helped support crude prices.
Further underpinning prices,investors remained wary of escalating tensions between Israel and Iran, withIsraeli Defence Minister Yoav Gallant promising an Israeli strike against Iranwould be "lethal, precise and surprising".
U.S. President Joe Biden spoke withIsraeli Prime Minister Benjamin Netanyahu about Israel's plans concerning Iranin a 30-minute call on Wednesday that the White House described as "directand very productive".
Biden "continues to discourageIsrael from targeting oil facilities, but there is growing concern thatIsrael's allies have little influence on its strategy," analysts at ANZsaid in a note on Thursday.
Even with threats to theoil-producing Middle Eastern region top of mind, concerns about demand continueto underpin the fundamental outlook. The U.S. Energy Information Administration(EIA) on Tuesday downgraded its demand forecast for 2025 on weakening economicactivity in China and North America.
EIA data on Wednesday showed crudeinventories jumped by 5.8 million barrels to 422.7 million barrels last week.That was a bigger build than analysts polled by Reuters had expected, but muchlower than estimated on Tuesday by the American Petroleum Institute industrygroup.
However, oil demand has grown thismonth, according to analysts at JPMorgan, helping support prices.
"In the U.S., gasoline demandsurged by 800 kbd week over week.. Across Asia, flight activity rebounded afterbeing disrupted by multiple typhoons. In China, daily flight activity soared toan eight-week high," the analysts said in a note.
"With the majority oftravel-related demand now behind us, the focus shifts to the impendingweather-driven rise in demand in the coming weeks."
(REUTERS)
