Adedapo Adesanya
By Adedapo Adesanya
Crude oil prices rose to the $80 per barrel level on Thursday on the back of demand concerns and a drop in war-risk premium.
The price of Brent rose by 47 cents or 0.59 per cent during the session to $80.01 a barrel and the US West Texas Intermediate (WTI) crude gained 41 cents or 0.54 per cent to trade at $75.74 a barrel.
According to analysts, the market is clearly less concerned about the potential for Middle Eastern supply disruptions and is instead focused on an easing in the balance.
They noted that fears of Middle East supply disruptions have eased since the Israel-Hamas has not affected underlying oil market fundamentals.
Oil prices have remained below where they were in late September, a week before the Hamas attack indicating that strong oil market fundamentals are prevailing over any fears at the moment.
Data from China on Thursday showed policymakers struggling to control disinflation, raising doubt over the chances of economic recovery in the world’s biggest commodity consumer.
China’s consumer prices swung lower in October, as key gauges of domestic demand pointed to weakness not seen since the pandemic, while factory-gate deflation deepened, casting doubts over the chances of a broad-based economic recovery.
The consumer price index (CPI) dropped 0.2 per cent in October from a year earlier and slipped 0.1 per cent from September, data from the National Bureau of Statistics (NBS) showed on Thursday.
Also, the world’s biggest crude oil importer total exports of goods and services contracted faster than expected, feeding worries about the energy demand outlook.
US crude oil inventories increased by 11.9 million barrels over the week to November 3, according to the American Petroleum Institute (API) figures.
If confirmed, this would represent the biggest weekly build since February. The US Energy Information Administration (EIA), however, has delayed the release of weekly oil inventory data until November 15 for a system upgrade.
There also remains the belief that major central banks have completed their rate hikes.
High-interest rates raise the cost of borrowing, dampening demand in markets, including oil.
The Organisation of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) are due to offer their view on the state of oil demand and supply fundamentals next week.
OPEC is set to meet at the end of the month to discuss output policy for 2024.
