Oil rises due to tensions in the Middle East, with a focus on inventory data

15 Nov 2023 , 10:24 AM

Due to Middle East tensions and a declining dollar, oil prices increased during the first part of Asian trading on Wednesday. Investor attention was also drawn to inventory data, which had been delayed by two weeks.

U.S. West Texas Intermediate (WTI) crude increased 2 cents to $78.28, while Brent futures increased 8 cents to $82.55 a barrel.

According to the Israeli military, its soldiers were operating against Hamas inside Al Shifa, the largest hospital in Gaza, on Wednesday.

U.S. President Joe Biden stated on Tuesday that he expects the hostages held by the violent Hamas organisation would be freed and that he is holding daily talks to achieve this goal.

On Wednesday, the U.S. Energy Information Administration (EIA) will make public its first update on the oil inventory in the past two weeks. Because of a systems upgrade, the EIA was unable to produce a storage report last week. 

As per a Reuters poll, energy companies are expected to have added approximately 1.8 million barrels of crude to U.S. stocks for the week ending Nov. 10, which aligns with the findings of the American Petroleum Institute released on Tuesday.

The International Energy Agency (IEA) raised its demand growth projections on Tuesday, although it still has a far worse view for 2024 than producer organisation OPEC.

The expectation that interest rates will be lowered by the US Federal Reserve in the spring of 2020 knocked the value of the US dollar down to a two-and-a-half-month low relative to a currency basket. Because purchasers paying in other currencies can purchase crude at a lower price, a declining dollar can increase demand for oil.

Wednesday’s Asian data releases include China’s retail sales, industrial output, investment, and jobless figures for October, as well as the third-quarter GDP of Japan. The data is released while Chinese and American presidents, Xi Jinping and Joe Biden, are meeting in San Francisco for the Asia Pacific Economic Cooperation summit.

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