By Adedapo Adesanya
The oil market edged up on Friday on expectations of an impending attack by Iran on Israel from Iraq in the coming days.
Brent crude, the international benchmark, was up by 29 cents or 0.4 per cent during the session to $73.10 a barrel and the US West Texas Intermediate (WTI) crude gained 23 cents or 0.3 per cent to settle at $69.49 per barrel.
On Thursday, it was reported that Israeli intelligence suggests that Iran is preparing to attack the country from Iraq within days.
Market analysts point out that the impact on oil prices may be muted as the attacks signify a show of strength rather than action.
Both countries have engaged in a series of strikes within the broader Middle East warfare set off by fighting in Gaza, triggered by Iran backing several groups that are currently fighting Israel, including Hezbollah in Lebanon, Hamas in Gaza and the Houthis in Yemen.
The US asked Lebanon to declare a unilateral ceasefire with Israel to revive stalled talks to end hostilities between Israel and Hezbollah.
Another factor supporting prices is the Organisation of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+ which could delay plans to increase supply in December.
Additional supply from some members of the 22-nation alliance will depress prices, so the market will welcome the decision not to open the taps for another month, especially with oil demand improving and supply rising elsewhere.
The group has always maintained that its planning production cuts rollback would depend on market conditions.
The US, the world’s largest oil producer has been seeing an increase in its production with Exxon Mobil saying its global output hit an all-time high while Chevron also said its US production hit a record high.
The US Energy Information Administration (EIA) said this week that drillers pulled a record 13.5 million barrels per day of oil out of the ground.
The EIA also said this week that output in August hit a record 13.4 million barrels per day and has said that annual output was on track to hit a record 13.2 million barrels per day in 2024 and 13.5 million barrels per day in 2025.
Last month, OPEC’s production increased by 370,000 barrels per day in October after Libya’s political resolution and its resultant 500,000 barrel-per-day output boost.
Libya’s output recovery led OPEC to raise its production to nearly 30 million barrels daily, even as Iraq, Iran, and Saudi Arabia lowered their output.