Despite the Middle East tensions, oil prices have risen in the market. The Brent crude oil for December delivery fell by 1.8 percent to trade at $88.49 per barrel at 2:00 PM ET in Friday’s intraday session, while the December WTI contract also dropped by a similar margin to change hands at $83.88 per barrel.
Brent has now fallen by 7 percent in the past week, while WTI fell by 4.8 percent over the same period as concerns about the global economy and energy demand weighed on sentiment.
Oil prices have been on a roller coaster ride in recent months, with negative catalysts often overshadowing the positives and vice versa.
Recently, fears of a spillover from the conflict between Israel and Hamas, which could involve Iran and its allies in the region, provided significant support to oil prices.
However, the U.S. and other countries have urged Israel to delay a full-scale invasion of Gaza, which the Middle Eastern nation has complied with so far.
Meanwhile, global oil supply continued to decrease, despite record shale production in the U.S.
The latest weekly data from the Energy Information Administration (EIA) was highly optimistic, with crude oil stocks falling by 4.49 million barrels to 419.75 million barrels, taking the deficit below the five-year average to 20.91 million barrels.
Crude oil stocks at the WTI price hub in Cushing, Oklahoma, fell by 0.76 million barrels to 21.01 million barrels, the lowest level in nine years. Meanwhile, gasoline stocks dropped by 2.37 million barrels to 223.90 million barrels, reducing the surplus above the five-year average to just 0.40 million barrels.
Implicit demand improved significantly on a monthly basis, with total demand rising by 2.231 million barrels per day to 21,897 barrels per day, and gasoline demand increasing by 362,000 barrels per day to 8,943 barrels per day.
Gasoline demand through October is 8,792 barrels per day, a year-on-year contraction of only 0.2 percent, which is a significant improvement compared to the 5.6 percent decline recorded in September.
Gasoline demand for the year-to-date is 0.4 percent higher.
