Brent crude oil is closing in on the $80 price point Thursday afternoon, with WT reaching above $76 per barrel on healthy U.S. economic data combining with a force majeure at Libya’s largest oilfield and mounting tensions between Israel and Hamas.
At 2:19 pm CDT, WTI crude was trading at $75.99 per barrel, a $0.76 (+1.01%) increase on the day. Brent crude was trading up $0.66 (0.84%) on the day at $79.04.
Geopolitical uncertainties—heightened by the killing of a senior Hezbollah commander in Beirut—and a force majeure on Libya’s largest oil field, Sharara, have trumped the narrative of weak oil demand from the world’s largest oil importer, China. And fears of a potential recession in the United States—the world’s top oil consumer—were at least partially laid to rest on Thursday with favorable jobs data that exceeded market expectations.
Up until a few days ago, oil analysts suggested that a significant disruption in oil supplies would be necessary to sustain price increases for the commodity. Today’s news of Shararah’s force majeure seems to have contributed to the price hike, although whether that will be sustained has yet to be seen.
Despite oil’s recent lackluster price trend, global oil inventories, helped along by the OPEC+ production cuts, are drawing down. According to the Energy Information Administration’s recent Short Term Energy Outlook, global oil inventories will decrease by 800,000 barrels per day in the second half of the year, and decline even further in Q1 of next year before starting to grow again in Q2 2025, with production growth outside of OPEC+ expected to be strong.
By Julianne Geiger
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