Oil prices rebounded on Thursday, recovering from a 2.3% decline prompted by investor profit-taking and concerns regarding supply risks amid escalating tensions between Israel and Palestine.
Brent experienced a 0.71% uptick, trading at $80.11 per barrel, following its previous session’s close at $79.54 a barrel. Similarly, the American benchmark West Texas Intermediate (WTI) rose by 0.65%, reaching $75.82 per barrel compared to Wednesday’s closing price of $75.33 per barrel.
The deepening Israeli-Palestinian conflict has introduced supply concerns, exerting pressure on prices and posing a risk of destabilizing the region, potentially disrupting oil supply routes.
In an official letter to Rafael Mariano Grossi, the director-general of the International Atomic Energy Agency (IAEA), Palestinian Foreign Minister Riyad al-Maliki expressed concerns about a nuclear threat aligning with the prevailing discourse in Israel against Palestinians.
These geopolitical tensions, if further escalated, could impact China’s and Europe’s already weak growth rates, potentially influencing the trajectory of the US economy and impeding further oil price increases.
Further influencing market dynamics, data indicating a 2.7% yearly and 0.2% monthly drop in China’s Price Index in October eased oil prices and rekindled deflationary concerns.
Contrary to expectations of a 300,000-barrel loss in US crude oil stockpiles, the American Petroleum Institute (API) reported an increase of approximately 11.9 million barrels in inventories on Tuesday.
This suggests a decline in oil consumption in the world’s largest oil-consuming nation, placing a ceiling on upward price pressures. The impact of these dynamics on November 14th, when the Energy & Petroleum Regulatory Authority announces new fuel prices in the country, remains to be seen.
