Oil prices up over positive supply data

By Duygu Alhan

Oil prices increased on Friday due to optimistic expectations about global oil demand and supply risks from the ongoing conflict in the Red Sea.

The international benchmark crude Brent traded at $79.12 per barrel at 0809 GMT, a 0.02% rise from the closing price of $79.10 a barrel in the previous trading session on Thursday.

The American benchmark, West Texas Intermediate (WTI), traded at the same time at $74.06 per barrel, up 0.14% from Thursday's close of $73.95 per barrel.

The rise in both benchmark prices was marginally subdued over predictions from the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) of a rise in global oil production amid the escalating tensions in the Red Sea.

According to the IEA's latest report released on Thursday, global oil supply is expected to increase by up to 1.5 million barrels per day (bpd) and reach a record high of 103.5 million bpd this year, exerting downward price pressure.

However, uncertainties in the demand outlook of the world's largest oil consumer, the US, supported price increases.

Data released by the US Energy Information Administration (EIA) on Thursday showed that US commercial crude oil inventories decreased by around 2.5 million barrels to 429.9 million barrels, compared to the American Petroleum Institute's expectation of a rise of around 483,000 barrels.

Despite the fall in US crude inventories, gasoline inventories in the country rose by around 3.1 million barrels to 248.1 million barrels over the same period, raising doubts about a demand rebound.

Meanwhile, escalating tensions in the Red Sea limited further price falls and bolstered concerns that disruptions in the global supply chain would adversely affect energy shipments.

Yemen's Houthi group announced on Thursday that they struck a US vessel in the Gulf of Aden. A Houthi military spokesman said the attack was in response to US and UK aggression against Yemen and also to pressure Israel to halt its deadly war on the Gaza Strip.