Crude oil prices edged lower today amid geopolitical tensions and disruptions in US oil production. In addition, there are concerns about slowing demand in China.
Brent crude was down 17 cents (0.2%) at $78.93 a barrel and US West Texas Intermediate (WTI) crude was down 3 cents at $74.05.
Yesterday, both benchmarks rose 2% when the International Energy Agency (IEA) which is part of the OPEC group predicted strong growth in global oil demand this weekend around 1% to 2% higher.
Recently, Pakistan launched an attack on separatist militants in Iran on Thursday. It was a retaliation to Tehran's attack on their base and claimed the lives of two children.
According to the President of NS Trading, Hiroyuki Kikukawa said that at a time when tensions in the Middle East are spreading, many investors are taking 'sell' steps and are careful in arranging 'buy' steps because the economic movement in China remains slow.
Otherwise, tensions in the Middle East are rising quickly and it is likely that WTI will continue to trade in the range around $70 to $76.
In addition, two oil tankers that changed direction from the Red Sea turned back and went through the Bab al-Mandab Strait. The disruption caused by the Houthi group in Yemen continues to disrupt shipping and global trade.
The US Energy Information Administration reported a larger-than-expected crude oil inventory of 2.5 million barrels due to strong demand from refineries last week. But gasoline and distillate inventories rose to year-on-year highs.
Meanwhile, about 40% of North Dakota's oil production is still shut down due to extreme cold weather and difficult drilling operations.
The IEA has again raised its forecast for global oil demand growth in 2024, although the forecast remains lower than OPEC's expectations. The market is still moving well because of strong growth for other manufacturers.
