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Oil prices rose on Friday as investors fretted about worsening supply shortages for the remainder of the year.
International benchmark crude Brent traded at $87.97 per barrel at 11.05 a.m. local time (0805 GMT), a 2.29% gain from the closing price of $86 a barrel in the previous trading session on Thursday.
The American benchmark West Texas Intermediate (WTI) traded at the same time at $84.91 per barrel, up 2.41% from Thursday’s close of $82.91 per barrel.
Supply-side shortages remained the focus in oil markets.
Despite Israel’s limited contribution to global oil supply, the ongoing conflict between Palestine and Israel is generating fears of the possibility of a regional spillover, endangering infrastructure damage, and consequently deepening the supply deficit predicted for the rest of the year.
Israel’s attacks on the Syrian capital Damascus and the city of Aleppo on Thursday, targeting their airports, raised concerns that the conflict could escalate.
A potential uptick in demand this year also supported upward price movements.
The International Energy Agency (IEA) boosted its 2023 demand growth prediction to 2.3 million barrels per day (bpd) in a monthly report on Thursday, bringing it closer to OPEC’s unchanged forecast of 2.4 million bpd.
Meanwhile, the IEA lowered its oil demand growth forecast for next year to around 900,000 bpd, suggesting that “a harsher economic climate and continued progress in energy efficiency will weigh on oil consumption.” By contrast, OPEC forecasts that demand will rise by 2.2 million bpd next year.
However, data indicating weaker demand in the US, the world’s top oil consumer, curbed price rises.
US Energy Information Administration data released Thursday showed that the country’s commercial crude oil stocks rose by approximately 10.2 million barrels.
