Oil prices declined Thursday, undoing gains from the previous session, as the Organization of the Petroleum Exporting Countries (OPEC) reject Iran’s demand for an oil embargo against Israel and as the US prepared to loosen sanctions against Venezuela to allow more oil to flow internationally.
To reach $91.07 per barrel, Brent futures for December dropped 0.5%, or 43 cents. In the US, the price of a barrel of West Texas Intermediate (WTI) for November, which expires on Friday, decreased 0.2 %, or 17 cents.
The more active December WTI contract was down 0.3 percent, or 22 cents, at $87.05 a barrel at 04:42 GMT.
After Iran demanded an oil embargo against Israel over the conflict in Gaza and after the US, the largest oil consumer in the world, reported a larger-than-anticipated inventory draw, further tightening supplies.
According to sources cited by Reuters, OPEC does not intend to respond to Iran’s request in the near future, allaying worries about potential disruptions.
According to Citi analysts in a note, Israel imports about 250,000 barrels of oil per day (bpd), mainly from Iraq, Kazakhstan, Azerbaijan, and African nations.
“We believe an embargo from Kazakhstan and Azerbaijan, a strong Israeli ally, is unlikely,” they said.
The price decline occurred according to Tina Teng, an analyst for CMC Markets, following President Joe Biden’s visit to Israel which ended without the Israel-Hamas conflict getting any more heated.
“But the market is still under upside pressure amid the geopolitical tensions,” she said.
Despite the Israel-Hamas conflict, sanctions against Russia, and decisions by OPEC+ to reduce output, Venezuela’s oil flows may contribute to a reduction in global oil prices.
However, in order to increase output after years of sanctions, Venezuela will need to receive investments.
The Energy Information Administration reports that last week saw a decline in crude oil and fuel inventories due to an increase in demand for heating oil and diesel.
In the week leading up to October, distillate fuel inventories decreased by 31.2 million barrels. According to EIA data, 13 to 113.8 million barrels.
Petroleum stocks decreased by 40.5 million barrels to 419.7 million barrels, while gasoline inventories decreased by 23.4 million barrels to 223.03 million barrels.
As domestic refineries are anticipated to increase output as seasonal maintenance concludes, supply may become even more limited.
In November, Russia’s oil exports through its western sea ports are predicted to decline by about 300,000 barrels per day.
