Major oil companies including Chevron (CVX), Shell (SHEL), and ExxonMobil (XOM) ticked higher in pre-market trading on Thursday even as the International Energy Agency (IEA) warned that oil markets will continue to “remain on tenterhooks” as the war between Israel and Hamas persists.
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The IEA stated in its monthly report, “The Middle East conflict is fraught with uncertainty and events are fast developing.” The energy watchdog noted that geopolitical risk has risen sharply and it will continue to monitor oil markets and “stands ready to act if necessary to ensure markets remain adequately supplied.”
If the oil supply is hampered, the IEA plans to release emergency stocks of member countries and/or restrain demand.
The Middle East accounts for 33% of global oil trade done through the sea route and the conflict has raised fears of production disruptions. While Israel isn’t a major oil producer, the potential impact on regional energy production is a significant concern to the market.
Meanwhile, crude oil stockpiles increased in the U.S. to 12.94 million barrels in the week ending October 6, according to data from the American Petroleum Institute (API). The API data indicated that gasoline inventories rose to 3.65 million barrels for the week.
The Energy Information Administration (EIA) data is expected to be released later today and analysts expect commercial crude oil stockpiles to increase by 900,000 barrels, while gasoline inventories are likely to rise by 400,000 barrels. In contrast, distillate stocks are estimated to decline by 300,000 barrels.
West Texas Intermediate (WTI) crude oil index was up by 0.83% at $84.18 at the time of writing.
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