FALCON POWERS – Oil prices increased in early Asian trading on Thursday amid fears of potential supply disruptions from the Middle East, alongside reports of Israel’s intention to strike Iran, as well as rising fuel demand due to Hurricane Milton in Florida.
By 09:03 GMT, Brent crude futures rose by 51 cents, or 0.63%, to $77 per barrel, while West Texas Intermediate (WTI) crude futures also increased by 52 cents, or 0.71%, to $73.79 per barrel.
The world’s largest oil producer and consumer is facing another major storm, Hurricane Milton, which has reached the western coast of Florida, causing strong winds and the potential for rising sea levels. The storm has already increased gasoline demand in the state, leading to supply shortages at about a quarter of gas stations, which has supported crude prices.
Prices have also been bolstered by ongoing investor caution over a potential escalation of tensions between Israel and Iran, as Israeli Defense Minister Yoav Gallant warned Iran of a strike that would be “lethal, precise, and surprising.”
U.S. President Joe Biden spoke with Israeli Prime Minister Benjamin Netanyahu about Israel’s plans regarding Iran during a 30-minute phone call on Wednesday, which the White House described as “direct and very constructive.”
However, despite the focus on threats related to production from the Middle East, weak demand continues to overshadow the fundamental outlook. The U.S. Energy Information Administration lowered its demand forecasts for 2025 on Tuesday due to sluggish economic activity in China and North America.
Data from the agency on Wednesday showed that crude inventories jumped by 5.8 million barrels to 422.7 million barrels last week. This increase exceeded analysts’ expectations surveyed by Reuters but fell significantly short of the American Petroleum Institute’s estimates released on Tuesday.
