Oil prices rise on optimism over solid US fuel demand
Shafaq News/ Oil prices rose on Thursday,extending the previous day's rally, driven by optimism over U.S. fuel demandfollowing an unexpected drop in crude and gasoline inventories, while reportsthat OPEC+ may delay a planned output increase offered support.
Brent crude futures gained 47 cents, or 0.65%,to $73.02 a barrel by 0505 GMT. U.S. West Texas Intermediate crude futures ,which are set to expire later in the day, climbed 43 cents, or 0.63%, to $69.04per barrel.
Both contracts rose more than 2% on Wednesday,after falling more than 6% earlier in the week on the reduced risk of a widerMiddle East conflict.
U.S. gasoline stockpiles fell unexpectedly inthe week ending Oct. 25 to a two-year low on strengthened demand, the EnergyInformation Administration said, while crude inventories also posted a surprisedrawdown as imports slipped.
Nine analysts polled by Reuters had expected anincrease in gasoline and crude inventories.
"The surprise decline in U.S. gasolinestockpiles provided a buying opportunity as demand appeared stronger thananticipated," said Toshitaka Tazawa, an analyst at Fujitomi Securities.
"Expectations of a potential delay in theOPEC+ production increase were also supportive ... If they do delay, WTI couldrecover to the $70 level," he said.
Reuters reported OPEC+, which groups theOrganization of the Petroleum Exporting Countries and allies such as Russia,could delay a planned oil production increase in December by a month or morebecause of concern over soft oil demand and rising supply.
The group is scheduled to raise output by180,000 barrels per day (bpd) in December. It had already delayed the increasefrom October because of falling prices.
A decision to postpone the increase could comeas early as next week, two OPEC+ sources told Reuters.
OPEC+ is scheduled to meet on Dec. 1 to decideits next policy steps.
Manufacturing activity in China, the world'sbiggest oil importer, expanded in October for the first time in six months,suggesting that stimulus measures are having an effect.
Markets are awaiting the results of the U.S.presidential election on Nov. 5 as well as further details of China's economicstimulus. Reuters reported that China could approve the issuance of over 10trillion yuan ($1.4 trillion) in debt over the next few years on the last dayof its Nov. 4-8 parliamentary meeting.
In the Middle East, Lebanon's prime ministerexpressed hope on Wednesday that a ceasefire deal with Israel would beannounced within days as Israel's public broadcaster published what it said wasa draft agreement providing for an initial 60-day truce.
The push for a ceasefire for Lebanon is takingplace alongside a similar diplomatic drive to end hostilities in Gaza.
But the market impact is likely to be muted.
"Most of the Middle East geopolitical riskwas stripped out of the oil price after Israel's response to Iran over theweekend," IG market analyst Tony Sycamore said.
Iran said that Israeli strikes on Saturday, inretaliation for Iran's Oct. 1 attack on Israel, caused only limited damage.
(Reuters)
