Oil Prices Rebound Amid Supply Concerns and Geopolitical Risks – Analysis and Breakdown
Oil prices bounced back on Wednesday after a sharp drop, ending a three-day streak of gains. Investors have been wavering between worries about potential supply losses from Libya and the Middle East and concerns about global fuel demand.
Brent crude futures rose by 0.31% to $79.80 a barrel, while U.S. West Texas Intermediate crude futures increased by 0.23% to $75.70. The market saw a more than 2% decline on Tuesday, snapping a three-day streak of gains due to concerns about low refinery profit margins affecting fuel demand.
Industry data released on Tuesday showed a decrease in U.S. oil and fuel inventories, providing some support to the market. However, the biggest risks remain the potential loss of supply in Libya and escalating conflicts in the Middle East involving Iran and Lebanon.
In Libya, oilfields have halted production amid a dispute over control of central bank and oil revenue. The ongoing conflict between Israel and Hamas in Gaza, along with tensions between Israel and Hezbollah in Lebanon, add to the geopolitical risks affecting oil prices.
Weekly U.S. oil storage data is expected later on Wednesday, which could provide further insights into inventory levels and market dynamics. Overall, the market continues to be influenced by supply concerns and geopolitical tensions, which could impact oil prices in the near future.