Janice R. Andrews
After a sharp drop the day before, oil prices went up again on Wednesday, ending a three-day streak of rises. Investors are worried about both the demand for fuel around the world and the possibility that supply problems will arise in Libya and the Middle East. This unstable climate is making things hard for people who work in the oil business.
On February 9, 2:09 GMT, Brent oil prices went up by 25 cents, or 0.31%, to $79.80 per barrel. West Texas Intermediate (WTI) crude prices in the U.S. went up by 17 cents, or 0.23%, to $75.70 per barrel. Before these gains, prices dropped by over 2% on Tuesday, ending a three-day rise during which they had gone up by more than 7%. The drop was mostly caused by worries about refinery profit margins and slower-than-expected growth in world usage, which made it harder to predict how much fuel would be needed.
Industry figures released late Tuesday night showed that U.S. oil and fuel stockpiles were lower than they were the previous week, which helped the market in some ways. The American Petroleum Institute said that in the week ending August 23, crude oil stocks dropped by 3.407 million barrels. Gasoline stocks went down by 1.863 million barrels, and distillates stocks went down by 1.405 million barrels. This information shows that the supply situation is getting tighter, which is one reason why oil prices are going up again.
Even with these positive reasons, the market is still nervous because of global risks. A big worry is that Libya could stop sending oil because of ongoing political fighting between different groups, which could put at risk up to 1.2 million barrels per day of production. It is said that production at several oilfields in Libya has stopped because of a fight over who controls the national bank and oil money. Engineers at key oilfields say that production has either stopped or been cut back, but neither Libya’s National Oil Corporation nor the government in Tripoli have officially confirmed this.
With the war between Israel and Hamas terrorists in Gaza still going on, the Middle East also remains a very dangerous place. Israel and Hezbollah, a terrorist group backed by Iran, have been shooting at each other along the border with Lebanon as things have gotten worse. There are worries that this could lead to a bigger war in an area that is very important for the world’s oil supply.
The market will be closely watching the weekly U.S. oil stock data from the Energy Information Administration (EIA), which is due later today at 10:30 a.m. EDT. This information will give us more information about U.S. oil stocks and could have an effect on short-term market changes. Geopolitical conflicts and changing worries about demand keep buyers on the defensive as they try to make their way through the oil market, which is very complicated and changes quickly.
