By Tsvetana Paraskova of OilPrice.com
The oil market is on edge over the escalation of geopolitical probability inside the Middle East after this weekend’s assault by Hamas on Israel, with uncertainties about how occasions will unfold or how far the warfare would possibly per probability possibly effectively possibly unfold, the World Vitality Company (IEA) mentioned on Thursday.
“A pleasant wanting escalation in geopolitical probability inside the Middle East, a reputation accounting for higher than one-third of the sector’s seaborne oil alternate, has markets on edge,” the IEA mentioned in its carefully-watched Oil Market Doc for October printed these days.
Oil prices surged on Monday after the weekend assault by Hamas on Israel rekindled tensions inside the Middle East and the battle high class inside the market returned.
“Whereas there was no direct impression on bodily current, markets will stay on tenterhooks as a result of the disaster unfolds,” the IEA mentioned inside the doc.
Amid many uncertainties inside the warfare, and “Towards a backdrop of tightly balanced oil markets anticipated by the IEA for a while, the world group will stay laser-centered on dangers to the popularity’s oil flows,” the Paris-basically mainly primarily based world firm mentioned.
Whereas warning that the heightened tensions inside the Middle East would possibly per probability possibly effectively possibly pose dangers to the oil market, the IEA raised a miniature bit its 2023 oil demand growth estimate to 2.3 million barrels per day (bpd), up from 2.2 million bpd growth anticipated inside the September doc.
Nonetheless, the corporate decreased its demand growth estimate for 2024 by round 100,000 bpd, attributable to expectations of slowing economies and vitality effectivity weighing on oil consumption. The IEA sees subsequent yr’s oil demand growth at 900,000 bpd now, down from the 990,000 bpd develop anticipated in ultimate month’s doc.
“World oil demand growth is set to behind to 900 kb/d in 2024 as a result of the submit-Covid rebound runs out of steam whereas the economic enlargement slows and vitality effectivity enhancements weigh on oil make the most of,” the IEA mentioned.