Oil Prices Rise on Middle East Supply Worries

Concerns Over Middle Eastern Supply Disruptions

Oil prices saw an early trade increase on Thursday, building on the previous day’s significant gains. This surge was fueled by concerns about supply disruptions in the Middle East, with disruptions at a field in Libya and escalated tensions surrounding the Israel-Gaza conflict contributing to the price surge.

Libya’s Sharara Oilfield Shutdown

A full production shutdown at Libya’s Sharara oilfield, prompted by local protests, further intensified the supply worries. The oilfield has the capacity to produce up to 300,000 barrels per day and has been a frequent target for political protests.

Tension in the Middle East

Heightened tension in the Middle East was also driven by the blasts at an event commemorating commander Qassem Soleimani in 2020 and ongoing Israel-Hamas conflict. The recent strikes in Beirut and Red Sea shipping concerns have contributed to the escalating concerns.

API Data and OPEC Update

The market was also influenced by data from the American Petroleum Institute (API) showing a larger-than-expected decrease in stocks. Additionally, the Organization of the Petroleum Exporting Countries (OPEC) announced that cooperation and dialogue within the OPEC+ alliance will continue.

Upcoming EIA Data and OPEC Meeting

The Energy Information Administration (EIA) is set to release weekly data on Thursday, delayed by a day due to the New Year’s holiday. Furthermore, OPEC has scheduled a meeting for February 1 to review the implementation of the latest oil output cut.