Oil prices inched higher on Thursday following two days of losses, driven by renewed supply concerns from Libya and mixed signals from U.S. crude inventory data. Brent crude futures increased by 15 cents, or 0.19%, to $78.80 a barrel at 0605 GMT, while U.S. West Texas Intermediate crude futures rose by 27 cents, or 0.36%, to $74.79.
Both benchmarks had dropped over 1% the previous day after data revealed a smaller-than-expected decline in U.S. crude inventories. The stockpile fell by 846,000 barrels to 425.2 million, falling short of the anticipated reduction of 2.3 million barrels.
The market’s focus shifted back to potential supply disruptions from Libya, a key OPEC member. Analysts suggest these concerns could bolster oil prices. Priyanka Sachdeva, a senior market analyst at Phillip Nova, indicated that ongoing geopolitical uncertainties and disruptions in Libyan oil production, which could affect up to 1 million barrels per day, are likely to support oil prices.
Libya’s oil output in July was approximately 1.18 million barrels per day. Analysts are watching closely for how long the supply disruptions will last, as extended outages could influence OPEC+ production strategies in October, potentially impacting prices positively if supply constraints persist.
ING analysts noted that a prolonged shutdown in Libya might encourage OPEC+ to maintain or increase supply later in the year, while a brief disruption could complicate their decision-making process.
Additionally, expectations of potential interest rate cuts by the U.S. Federal Reserve also supported oil prices. Federal Reserve Bank of Atlanta President Raphael Bostic suggested that a rate cut might be on the horizon, given recent inflation and employment trends. Lower interest rates could stimulate economic activity and boost oil demand.
Related topic:
What Is Ultra Low Sulfur Diesel Fuel?
