Oil steady as prospect of more supply offsets Middle East conflict worries
Oil steady in early trade
Investors weigh escalating tensions between Israel and Lebanon
OPEC+ additional supply expected in December
U.S. oil stocks expected to have fallen last week, poll shows
Oct 1 (Reuters) -Oil prices were steady on Tuesday as the prospect of additional supply entering the market amid lacklustre global demand growth offset concerns that the escalating Middle East conflict could disrupt exports in the key producing region.
Brent crude futures LCOc1 for December delivery increased 13 cents, or 0.18%, to $71.83 a barrel as of 0050 GMT. U.S. West Texas Intermediate crude futures CLc1 for November delivery gained 11 cents, or 0.16%, to $68.28 a barrel.
Oil markets have been under pressure from weaker-than-expected demand growth this year, particularly in China, the world's biggest crude importer. Those demand concerns were reinforced on Monday after data showed the country's manufacturing activity shrank for a fifth month in September.
On Monday, Brent futures ended September down 9%, its third month of declines and largest monthly drop since November 2022. It slumped 17% in the third quarter for its biggest quarterly loss in a year. WTI fell 7% last month and dropped 16% for the quarter.
Despite the demand worries, escalating tensions between Israel and the Islamic militant group Hezbollah in Lebanon has increased potential for Iran, a key oil producer and member of the Organization of the Petroleum Exporting Countries (OPEC) that backs the militia, to be directly drawn into the conflict and possibly disrupt oil exports from the region.
The Israeli military began limited, localized and targeted raids against Hezbollah targets in the border area of southern Lebanon, it said in a statement early on Tuesday.
Still, major producers are set to increase their output before the end of the year.
"Crude oil was little changed as traders took stock of the outlook amid rising tensions in the Middle East," ANZ analysts said in a note.
"The risk of supply disruptions in the Middle East are being offset by the prospect of production hikes from OPEC. Despite its efforts to stabilise the oil market, prices have remained under pressure," they added.
OPEC+, which groups OPEC members and allies such as Russia, is scheduled to raise output by 180,000 barrels per day in December.
U.S. crude oil and fuel stockpiles were expected to have fallen last week by about 2.1 million barrels in the week to Sept. 27, a preliminary Reuters poll showed on Monday.
The poll was conducted ahead of a report from the American Petroleum Institute industry group due at 4:30 p.m. EDT (2030 GMT) on Tuesday.
Reporting by Georgina McCartney in Houston; Editing by Christian Schmollinger
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
