Oil prices experienced an increase on Thursday, rebounding from two-week lows. Investors are closely monitoring the situation in the Middle East alongside China’s recently announced stimulus plans. At the same time, the market is anticipating the release of official oil inventory data from the US, as reported by Reuters.
As of Thursday morning, a barrel of Brent crude oil, the European benchmark, is priced at USD 74.44, a slight rise from USD 74.03 on Wednesday afternoon. US WTI oil also saw an increase, trading at USD 70.62 compared to USD 70.28 the previous day.
Despite these slight gains, both Brent and WTI have declined by 6-7% over the course of the week. This drop follows a reduction in demand forecasts for 2024 and 2025 issued by the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA). Risk premiums have also eased as fears of Israeli retaliation diminished, though uncertainty surrounding the conflict in the Middle East persists.
In addition to geopolitical concerns, investors are awaiting further details from Beijing regarding its plans to stimulate the struggling Chinese economy. The broad outlines of these measures were unveiled on 12 October, but more specific actions are yet to be clarified.
In the US, market sources, citing data from the American Petroleum Institute, reported a reduction in oil and distillate inventories. Crude oil stockpiles fell by 1.58 million barrels for the week ending on 11 October. Gasoline inventories saw a significant drop of 5.93 million barrels, while distillate stocks fell by 2.67 million barrels.
Later on Thursday, official data from the US Energy Information Administration (EIA) is expected to confirm these figures for oil inventories.
In the broader commodities market, gold prices also moved slightly higher. A troy ounce of gold traded at USD 2,679.25 on Thursday morning, compared to USD 2,672.08 on Wednesday afternoon.
The market remains focused on key developments in both geopolitical and economic spheres, with ongoing uncertainty likely to keep investors on edge.
Union Jack Oil plc (LON:UJO) is an oil and gas company with a focus on onshore production, development, exploration and investment opportunities within the United Kingdom and the United States of America hydrocarbon sector.
