By Ken Afor
On Friday, oil prices showed only minor transformations after having increased during the immediate prior session. However, they will still dip for the third consecutive week as the apprehensions of production disruptions owing to the Israel-Hamas struggle lessen, permitting the apprehensions over demands for petroleum to resurface.
At 0157 GMT, Brent crude futures for January remained steady at $80.01 per barrel, while WTI crude futures for December decreased by 7 cents and were at $75.67.
Both Brent and WTI have posted their longest weekly losing streak in months, with Brent dropping 5.7% and WTI falling 5.9% since last week. The three weeks of losses surpasses the four-week decline that both contracts experienced from mid-April to early May.
“The threat of disruptions to supplies from the Middle East continues to fall,” ANZ Research said in a note on Friday.
“The conflict remains well contained within Gaza, despite concerns it would escalate as neighbouring Arab nations show their displeasure.”
On Thursday, the White House announced that Israel had consented to a four-hour halt in military operations in certain areas of northern Gaza, though there was no indication of a full ceasefire.
As disruptions from the Israel-Hamas conflict begin to lessen, worries about demand, especially from China, the biggest oil importer in the world, are increasing.
Amidst this week’s Chinese economic figures being low, fears of flagging need have been exacerbated. Moreover, China’s refiners, the largest purchaser of crude oil from the world’s biggest exporter Saudi Arabia, asked for a decrease in supply from Saudi Arabia for December.
Analysts from Citi stated in a Thursday memo that it was anticipated the downward pressure on prices would decrease, with prices returning to their lowest level in July this week.
“We expect prices to consolidate, and we maintain our near-term price forecasts with support expected to come from refinery maintenance easing and a shift in the risk-reward for investors following the recent sell-off,” Citi said.
“Indeed upside risks abound from current levels, the potential for (the Organization of the Petroleum Exporting Countries and allies) to look to act to defend prices, while supply risks in the Middle East remain elevated.
