Crude oil prices experienced a slight decline in trading on Friday (October 24), but due to uncertainties regarding supply from the Middle East and a significant decrease in U.S. crude oil inventories, they moved towards a weekly increase. Brent crude oil was priced at $105.45 per barrel at 7:47 AM GMT, down 47 cents or 0.44 percent. Additionally, U.S. WTI crude oil traded at $97.35 per barrel, down 62 cents or 0.63 percent.
Impact of Storm on U.S. Crude Oil Inventories
U.S. WTI crude oil saw a rise of over three percent in trading at the end of Thursday (October 23) due to a decrease in crude oil inventories caused by production halts due to the storm. Given the developments of the current week, Brent crude prices have increased by 0.72 percent, while U.S. WTI has seen a rise of 5.9 percent.
Read more: Strengthening of the Canadian Natural Gas Market as Winter Approaches
Uncertainties in the Middle East and Their Impact on the Market
Analysts at ING Bank noted the uncertainties in the Middle East and concerns about the continuity of oil flow through the Strait of Hormuz. They stated that this situation has led the market to adjust oil prices with a significant risk premium. To create more confidence in the market and ensure a stable oil flow from the Strait of Hormuz, reaching an agreement to end the war between the U.S. and Iran seems essential.
The research institute Kepler reported that the average oil flow through the Strait of Hormuz in the seven days ending October 13 was 11.62 million barrels per day. This figure represents about 68 percent of the baseline level of 17.15 million barrels.
The diesel refining margin in Europe also fell by nearly 2 percent to $78.67 per barrel on Friday. This decline occurred after the International Energy Agency agreed on Thursday to release over 20 million barrels of diesel into the market. The margin reached $95 per barrel in September due to diesel supply constraints.
Kepler analysts stated on Thursday that disruptions in traffic through the Strait of Hormuz have severely reduced the flow of crude oil from Gulf countries. They predicted that in the absence of a comprehensive political agreement, the process of improvement in the Strait of Hormuz is likely to be slower and more uneven.
Read more: Decrease of 8.6 Million Barrels in Crude Oil Inventories in the United States · Increase in Natural Gas Futures Prices Following Positive Storage Expectations
