Singapore: Brent oil futures hold steady near seven-week highs
As the market analyzed geopolitical developments in the Middle East and awaited US inventory data, Brent oil futures remained relatively unchanged in Asia on Thursday, lingering just below seven-week highs.
August Brent increased by 9 cents to $85.16 per barrel by 9:30 a.m. Saudi time, while US West Texas Intermediate futures for July, set to expire on Thursday, saw a 15-cent dip at $81.42 per barrel.
Although there was no WTI settlement on Wednesday due to a US holiday, trading was mostly subdued with the more active August contract falling 15 cents to $80.56 per barrel.
Geopolitical tensions impact oil prices
In early trade on Thursday, Brent crude futures inched up as news broke of Israeli tanks advancing into Gaza. Israeli troops, supported by tanks, warplanes, and drones, pushed further into the city of Rafah, resulting in the deaths of eight people according to residents and Palestinian medics.
“Markets are bracing for an escalation in the Gaza crisis, which could potentially disrupt oil supplies from the key producing region,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
However, concerns about an inventory build are currently overshadowing fears of escalating geopolitical tensions, Sachdeva added.
Focus on US oil inventories report
WTI crude slipped ahead of the US government’s oil inventories report, which was delayed by a day due to the national holiday. The Energy Information Administration is expected to release last week’s oil stocks data at 6:00 p.m. Saudi time on Thursday.
According to market sources citing American Petroleum Institute figures, an industry report revealed that US crude stocks increased by 2.264 million barrels in the week ended June 14, while gasoline inventories saw a decline.
“EIA’s weekly oil inventory report will be closely scrutinized for any indications of weak demand,” stated ANZ Research analysts on Thursday.