Oil prices rose by about 2% at the end of the week’s trading, with increasing fears that oil supplies from the Middle East region would be affected by the continued Israeli aggression against Gaza stripAnd to support oil prices, Iraq confirmed its commitment to the production levels set by the “OPEC Plus” alliance, before a meeting that the alliance will hold in two weeks. However, fears of a decline in the growth of the Chinese economy mitigated the increase in crude prices in global markets.
Brent crude futures rose $1.42, or 1.8%, to settle at $81.43 per barrel. US West Texas Intermediate crude rose $1.43, or 1.9%, to $77.17 upon settlement.
The rise – yesterday, Friday – in oil prices came despite recording a weekly decline of 4%, recording the third weekly loss in a row.
“Concerns about demand have replaced fear of production disruptions due to the conflict in the Middle East,” Commerzbank analysts said.
Crude prices are witnessing support due to the ongoing Israeli aggression on the Gaza Strip, which threatens to expand the crisis in the oil-rich Middle East region, which controls waterways through which large quantities of oil pass, heading to various regions of the world.
Weak Chinese economic data this week added to concerns about faltering demand. In addition, refineries in China (the largest buyer of crude oil) requested less supplies from Saudi Arabia (the world’s largest oil exporter) for next December, which reduced global crude prices.
The OPEC Plus alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Russia, on November 26, in Vienna.
The Iraqi Oil Ministry said that Baghdad is committed to the OPEC Plus agreement regarding determining production levels.
Helima Croft, an analyst at RBC Capital Markets, said that the possibilities of Saudi Arabia extending its production cut into the first quarter of 2024 are certainly increasing, given renewed market concerns about Chinese demand and broader macroeconomic expectations.