Oil prices stable as market weighs supply risks, rising Middle East exports
Brent futures rise 0.3% to US$100.58 a barrel; US West Texas Intermediate crude climbs to US$89.44
Oil prices remained relatively unchanged on Tuesday, after initially rebounding and then losing ground. The market evaluated potential increases in Middle Eastern crude exports and a forthcoming Group of Seven release of emergency diesel and crude reserves against supply concerns stemming from Houthi attacks in Yemen. Brent futures climbed 0.3%, settling at US$100.58 a barrel, while US West Texas Intermediate crude rose 0.01%, ending at US$89.44 per barrel.
In the past week, roughly 12 million barrels of crude oil and 2 million bpd of refined products have been exported from the Middle East, according to Vitol's CEO. Saudi Energy Minister Prince Abdulaziz highlighted that East-West pipeline throughput had reached 5.8 million barrels as of Tuesday morning. However, the possibility of additional Middle Eastern supply disruptions kept oil price declines modest.
Saudi Arabia's airports in Jazan and Najran faced attacks on Monday, injuring three individuals and causing minor damage. Meanwhile, tensions between Saudi Arabia and Iran-backed Houthis continued to escalate, with Riyadh intensifying airstrikes in support of its offensive against the rebels. Ukraine's President Volodymyr Zelensky warned on Tuesday of a conceivable "massive attack" by Russia, which is currently the world's third-largest crude oil producer following the US and Saudi Arabia.
Sanctions imposed to limit Russian energy exports have aided oil prices since Russia's invasion of Ukraine in 2022. A potential resolution to the Russia-Ukraine conflict may enable Russia to resume energy exports. In the US, the National Hurricane Center forecast a 100% probability of a cyclone forming in the Gulf of Mexico within the next week, which could boost oil prices by disrupting oil and natural gas production and damaging energy infrastructure.
The International Energy Agency is set to meet next week to determine the specifics of a diesel stock release amid growing market uncertainty over the quantity of barrels Europe and the US intend to make available to address shortages and soaring prices.
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