Oil companies plunge into deepwater projects despite tight budgets: Report – Oil & Gas Middle East
Despite an unexpected increase in U.S. gasoline supply, oil prices rose modestly on Wednesday as investors fretted that a Gaza conflict may hamper Middle Eastern petroleum supplies.
Brent oil futures increased 24 cents, or 0.3%, to $85.25 per barrel. WTI futures rose 7 cents to $80.90 a barrel.
Israel and Lebanon’s Hezbollah have been intensifying cross-border tensions in recent weeks, raising worries of an all-out conflict that might include other regional countries, including Iran.
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“The geopolitical risk premium has been rising as a war between Israel and Lebanon could involve Iran directly, which is concerning,” Lipow Oil Associates’ Andrew Lipow said.
Turkish President Tayyip Erdogan urged regional nations to help Lebanon.
Houthi Red Sea shipping strikes have boosted oil prices. In a coordinated military action with the Islamic Resistance in Iraq, the organization claims it used drones to attack a ship in Haifa harbor.
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After the U.S. Energy Information Administration (EIA) announced a 3.6 million barrel increase in crude oil stockpiles last week, oil prices dipped early in the session, shocking Reuters experts who anticipated a drawdown.
Giovanni Staunovo of UBS remarked that U.S. stocks are growing while inventories abroad are falling.
“I would call the oil market a tale of different stories,” he remarked. “Japan and Europe saw oil inventory declines last week. The market seems to be tightening, but not in the U.S.”
In coming weeks, UBS expects oil prices to climb.
During peak summer driving season, oil dealers worry about sluggish U.S. gasoline demand.
U.S. gasoline demand last week fell 3.6% to 8.9 million barrels a day, or 10% of global oil consumption. Even though refiners curtailed production, gasoline stocks surged unexpectedly.
“These statistics are certainly going to disappoint the gasoline bulls,” said Lipow. “Absent a hurricane, we have adequate supplies for the summer driving season with July 4th right around the corner.”
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