The December crude oil price (WTI) reached $99.29 this week, while experiencing severe fluctuations. This contract started at $99.04 and surged to $101.37, but then dropped to $95.25 and returned to its initial level.
Market Fluctuations
At 0019 GMT, the December crude oil price faced a $0.25 increase or 0.25% compared to last week. These fluctuations indicate the turbulent market conditions and the inability of buyers and sellers to stabilize prices. The largest fluctuation of the week occurred after discussions regarding the mediation efforts of the President of Iran and the Chief of Staff of the Pakistan Army, which reduced risk from oil prices and caused the market to quickly fall from $101.37 to $95.25.
Attacks on Oil Facilities
Attacks on Saudi Arabia, naval fleets, and oil infrastructure, particularly the Houthi attacks on the Shaybah oil field, have increased the risks in the oil market. However, Saudi Arabia's production and exports were not seriously disrupted this week, and Middle Eastern crude oil continues to flow. These factors prevented crude oil prices from stabilizing above $101.37, and despite the attacks, buyers continued to seek oil.
U.S. Oil Inventory Report
The U.S. oil inventory report from last week indicated a decrease of 3.1 million barrels in commercial crude oil inventories, which benefited buyers. While gasoline inventories also decreased, diesel inventories increased. This report helped oil buyers continue their purchases amid the insecurity in the Middle East. Refining margins also remained due to disruptions in the fuel market, supporting crude oil demand from refiners.
Overall, the December crude oil price is experiencing severe fluctuations due to the looming threats of attacks. Given this situation, traders are closely monitoring security developments in the Middle East and the possibility of negotiations between the U.S. and Iran.
Read more: 10.9% decrease in attacks on oil products globally and increase in revenues · Oil price rises to $112 following Houthi attacks on Saudi Arabia
