Oil remains stable as the market watches Tensions in the Middle East and increased US crude stocks

26 Oct 2023 , 09:57 AM

Thursday’s oil prices saw little movement as the market assessed a variety of factors, including growing U.S. crude stocks and Middle East tensions.

U.S. West Texas Intermediate crude prices fell 3 cents to $85.36 a barrel, while Brent crude futures down 3 cents to $90.10 a barrel.

On Wednesday, the benchmark oil contracts closed almost 2% higher, supported by ongoing concerns over the situation in the Middle East.

However, investors were divided on Thursday on the surge in U.S. oil stockpiles, which they saw as a sign of weak demand and decline.

According to the Energy Information Administration, U.S. oil stockpiles increased by 1.4 million barrels last week to 421.1 million barrels, beyond the 240,000-barrel increase that analysts had predicted based on a Reuters survey.

According to EIA data, refinery utilization rates in the United States decreased by 0.5 percentage points to 85.6% of total capacity, while refinery crude runs decreased by 207,000 barrels per day.

Expectedly, investors will continue to monitor events in the Middle East due to concerns that any escalation will shake up the oil markets and cause supply disruptions.

According to news reports, Israel has agreed to postpone the anticipated assault of Gaza for the time being so that the US may deploy missile defense systems in the area quickly to defend US forces stationed there.

The prognosis for oil demand was nevertheless affected by macroeconomic worries, as this month’s unexpected decline in business activity figures for the eurozone demonstrated.

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