Oil Prices Fall As Middle East Worries Ease
By Alex Kimani
click here to read this article at Oilprice.com
*this article was not written by Roseland Oil & Gas
Oil markets have turned decidedly bearish after U.S. Secretary of State Antony Blinken revealed that Israeli Prime Minister Benjamin Netanyahu has accepted a cease-fire proposal to stop the war in Gaza, and all that’s remaining is for “Hamas to say yes.” Blinken met on Monday with top Israeli officials in Jerusalem. After hitting four-week highs, the options market’s so-called skew–the cost of insuring against spikes or troughs in prices–has turned bearish over the past couple of trading days, reversing bullish hedges against a fresh escalation in the Middle East. Meanwhile, crude oil futures have declined by the biggest margin in two weeks after reports suggesting that a ceasefire and hostage release deal in Gaza could be closer. Brent crude for October delivery was quoted at $78.21 per barrel at 10:20 hrs ET in Tuesday’s intraday session, down from $81.20/barrel a week ago, while WTI crude for September delivery was trading at $75.00 per barrel compared to $78.85/barrel a week ago.
According to Again Capital’s John Kilduff, persistent soft Chinese economic data has been undermining any kind of price strength in oil markets. On the other hand, ANZ research analysts have pointed out that the prospect of weak demand in China is offsetting any gains from risks to supply, with government data showing that crude demand in the country fell 8% Y/Y in July. Last week, disappointing economic data revealed that China’s industrial activity remains subdued.
Improving supply also does not help oil prices. According to Bloomberg, production at Libya’s Waha oil field has returned to normal levels of ~300K bbl/day after pipeline maintenance was completed earlier than expected, while output at the Sharara field has improved to ~85K bbl/day, according to Reuters. These developments come just two weeks after Libya’s National Oil Corporation declared force majeure on oil exports from the field following a blockade by protesters at the field.
By Alex Kimani
click here to read this article at Oilprice.com
*this article was not written by Roseland Oil & Gas