Oil prices up 1.0pc on US storm and Israel-Iran fears
Friday, 11 October 2024
LONDON, Oct 10 (Reuters): Oil prices rose more than 1 per cent on Thursday, underpinned by a spike in fuel demand as a hurricane barrelled into Florida, with Middle East supply risks also in focus.
Brent crude futures rose $1.20, or 1.6 per cent, to $77.78 a barrel by 1330 GMT. US West Texas Intermediate (WTI) futures were up $1.16, or 1.6 per cent, at $74.40.
In the United States, the world's largest oil producer and consumer, Hurricane Milton made landfall in Florida, where about a quarter of fuel stations sold out of gasoline, helping to support crude prices.
Prices spiked this month after Iran launched more than 180 missiles against Israel on Oct. 1, raising the prospect of retaliation against Iranian oil facilities. With Israel yet to respond, crude benchmarks have eased once more and remained relatively flat through the week.
But investors remained wary, given Israeli Defence Minister Yoav Gallant promised that any strike against Iran would be "lethal, precise and surprising".
US President Joe Biden spoke to Israeli Prime Minister Benjamin Netanyahu about Israel's plans concerning Iran, though ANZ analysts said there is growing concern that Israel's allies have little influence on its strategy.
Gulf states are lobbying Washington to stop Israel from attacking Iran's oil sites because they are concerned their own oil facilities could come under fire from Tehran's allies if the conflict escalates, three Gulf sources told Reuters.
Even with threats to the oil-producing Middle East in the spotlight, demand concerns continue to underpin the fundamental outlook.
"Without a genuine demand excess or supply shortage, the risk will remain skewed to the downside. Even if the Israeli bellicose rhetoric is embodied in an Israeli assault on Iranian oil infrastructure, the price reaction could be brief, albeit violent," said Tamas Varga at oil broker PVM.
The US Energy Information Administration on Tuesday downgraded its demand forecast for 2025 on weakening economic activity in China and North America.
EIA data on Wednesday showed crude inventories last week built more than expected by analysts in a Reuters poll.