Oil Prices Rise Slightly Amid Middle East Tensions and Supply Concerns

Oil prices experienced a modest increase as traders assessed potential supply risks from the Middle East against a backdrop of weak global demand, Bloomberg reports.

West Texas Intermediate (WTI) crude edged closer to $71 after a 0.3% decline on Wednesday, while Brent crude settled above $74.

Tensions in the region have escalated, with Israel intensifying airstrikes in Lebanon and Iran reporting an oil leak near a significant terminal, raising concerns over the country’s export capabilities. This comes after a rough start to the week for oil prices, with WTI dropping nearly 7% in the first two trading sessions following reports that Israel would refrain from targeting Iran’s crude facilities in retaliation for an attack on October 1.

This month, oil prices have fluctuated as worries about an escalation in the Middle East conflict—responsible for approximately one-third of the world’s crude supply—compete with increasingly bearish market signals. The International Energy Agency (IEA) warned that rising production from non-OPEC countries and sluggish demand growth could lead to a “sizable surplus” in the upcoming year, assuming no significant disruptions to oil flows.

In related news, an industry report indicated that US crude stockpiles fell by 1.6 million barrels last week, which, if confirmed by official data later on Thursday, would mark the first decline in three weeks. Additionally, traders are closely monitoring developments regarding housing policies in China, particularly after a disappointing earlier fiscal policy briefing raised concerns about demand in the world’s largest oil-importing nation.