Showing posts with label Israel killing Palestinians. Show all posts
Showing posts with label Israel killing Palestinians. Show all posts

Tuesday, 27 August 2024

Media hype to jack up oil price

We are of the view that western media plays a role in keeping oil prices high to facilitate the fund managers to make quick buck. Media uses expressions like “fall in US strategic reserves”, “turmoil in Middle East and North Africa”, “imposition of sanctions on Russia”, “turmoil in Nigeria”, “Houthis attack oil tanker” and the latest is “oil fields shutdown in Libya”.

Oil prices slipped on Tuesday after rebounding more than 7% over the previous three sessions on supply concerns prompted by fears of widening Middle East conflict and a potential shutdown of most of Libya's oil fields.

After the jump in oil prices on the back of geopolitical risk in the Middle East and a production halt in Libya, market participants are now holding back to assess further developments.

The 7% rise in Brent and 7.6% rise in WTI in the previous three sessions bucked a broader downtrend since hitting its 2024 peak of US$91.17 in April. The downturn was driven by concern over global crude demand, particularly from China and through the summer, which is typically a peak demand period.

On Monday, authorities in the Libya's east, where most of its oilfields are located threatened to halting production and exports, after a flare-up in tensions over leadership of the country's central bank. Those fields are responsible for almost all the country's 1.17 million barrels per day of crude output.

The jump in Brent has primarily been driven by short-term supply worries at the same time the weak demand outlook, especially for diesel, has driven down refinery margins across the world, said Ole Hansen, head of commodity strategy at Saxo Bank.

"It highlights an oil market that, without a prolonged Libyan supply disruption, may struggle to move much higher, with the mid-80s potentially providing a ceiling for now," Hansen added.

There was no confirmation from the internationally recognized government in Tripoli or from National Oil Corp (NOC), which controls the country's oil resources.

Oil has also been supported by an escalation in conflict between Israel and Iran-backed Hezbollah, with a major exchange of missiles after the killing of a senior Hezbollah commander last month.

"Markets remain on edge as skirmishes between Israel and Hezbollah intensify," ANZ analysts said in a note

A top US general said on Monday that the danger of a broader war had eased somewhat but that an Iran strike on Israel remained a risk.