Oil Prices Steady Amid Geopolitical Tensions

8 Aug 2024 , 09:19 AM

Oil prices stabilized on Thursday after a significant rally the previous day, as market participants remained cautious amid escalating tensions between Israel and Iran.

Brent crude, the global benchmark, traded near $79 a barrel, holding onto gains from Wednesday’s 2.4% surge. West Texas Intermediate (WTI) crude also hovered around the $76 level.

The recent uptick in oil prices follows a sharp decline earlier in the week, triggered by a broader market sell-off. However, geopolitical risks have since returned to the forefront, with Israel on high alert for potential retaliation from Iran following the assassinations of Hamas and Hezbollah leaders. While Iranian President Ebrahim Raisi has suggested a diplomatic path forward during a call with his French counterpart, uncertainty persists.

Adding to the market’s jitters, a Ukrainian cross-border attack on Russia has heightened geopolitical tensions in Europe. Meanwhile, a supply disruption at Libya’s largest oil field has provided some support to prices.

Despite a sixth consecutive week of crude inventory declines in the US, indicating tightening supply, concerns about slowing demand in the world’s largest oil consumer continue to weigh on the market. Additionally, builds in gasoline and crude stockpiles at the Cushing storage hub have tempered some of the bullish sentiment.