By Adedapo Adesanya
The price of Brent crude depreciated by 3 cents on Wednesday to $74.22 per barrel after the market latched on news that Israel may not strike Iranian nuclear and oil sites, easing fears of supply disruptions.
Also, the US West Texas Intermediate (WTI) crude went down by 19 cents or 0.3 per cent at midweek to settle at $70.39 per barrel amid a weak demand forecast.
Iran is a member of the Organisation of the Petroleum Exporting Countries (OPEC) and produced about 4.0 million barrels per day of oil in 2023.
Crude oil prices have given up most of the gains made in the wake of Iran’s October 1 ballistic missile attack on Israel.
Despite this, concern about an escalation in the conflict between Israel and the Iran-backed militant group Hezbollah remains.
On the demand side, OPEC and the International Energy Agency (IEA) cut their 2024 global oil demand growth forecasts, with China accounting for the bulk of the downgrades.
The IEA projected that global oil demand would peak before 2030 at less than 102 million barrels per day and then fall to 99 million barrels per day by 2035.
Positive economic news from China, the US, and Europe also helped cushion Wednesday’s slide in oil prices.
The Chinese government may raise $850 billion from special treasury bonds over three years to stimulate its weakening economy.
In the US, import prices fell by the most in nine months in September as energy product costs fell sharply, signalling that the Federal Reserve remain on course to keep cutting interest rates.
Data from Europe showed that the bloc is still growing, even if at the slowest possible pace. Analysts say this is unlikely to prevent the European Central Bank (ECB) from delivering an interest rate cut.
Crude oil inventories in the US fell by 1.58 million barrels for the week ending October 11, according to the American Petroleum Institute (API). For the week prior, the API reported a 10.9-million-barrel build in crude inventories.
So far this year, crude oil inventories have slumped by 7 million barrels since the beginning of the year, according to API data.
The reports were delayed by a day for the US Indigenous Peoples’ Day holiday on Monday.
The official data from the US Energy Information Administration (EIA) will be released later on Thursday.