Middle East Supply fears fuel oil price rise

The first week of January sees oil prices rising in surges each morning, an uptick fueled by growing apprehensions that there will be disruptions in the Middle East’s oil supply lines, particularly due to issues at a Libyan oilfield and amid global tensions.

“While the geopolitical situation is a concern for the oil market, a fairly comfortable oil balance over the first half of 2024 does help to ease some of these worries,” noted Warren Patterson, Head of Commodities Strategy at ING, a Dutch Oil distribution company.

Protests within Libya have prompted the shutdown of various oilfields. One such oilfield is the Sharara oilfield, known for producing over 300,000 barrels of oil daily.

Brent crude has gained 0.3% to hit $78.46 per barrel, while U.S. West Texas Intermediate crude futures increased by 0.43% to $73.01. Both benchmarks recorded a 3% uptick, settling higher on Wednesday for the first time in five days.

WTI marked its most notable daily percentage gain since mid-November.

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