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Oil prices experienced a rise in early trading on Thursday, January 4, extending substantial gains from the previous session amid concerns about Middle East supplies. This surge is attributed to the shutdown of production in a field in Libya and escalating tensions due to Israel’s conflict in the Gaza Strip.
As of 0101 GMT, Brent crude futures increased by 33 cents, or 0.42%, reaching $78.58 per barrel. Meanwhile, US West Texas Intermediate crude rose by 40 cents, or 0.55%, to $73.10.
Both benchmarks witnessed a 3% rise upon settlement in the previous session, marking the first increase in five days. US crude experienced its most significant daily percentage gain since mid-November.
The protests on Wednesday led to a complete halt in production at Libya’s Sharara oil field, capable of producing up to 300,000 barrels per day. The Sharara field, one of Libya’s largest, has been a frequent target of local and broader political protests.
The US Central Command reported that the armed group fired two anti-ship ballistic missiles in the southern Red Sea the day before.
Support for the market also came from data released by the American Petroleum Institute, revealing a 7.4 million-barrel decline in US crude inventories for the week ending December 29—double the expected decline according to analysts polled by Reuters. However, gasoline inventories rose by approximately 6.9 million barrels, contrary to expectations of a 200,000-barrel decrease, and distillate inventories increased more than anticipated.
The Organization of the Petroleum Exporting Countries (OPEC) confirmed the continuation of cooperation and dialogue within the OPEC+ alliance after Angola announced its withdrawal from the organization last month. A meeting of the group is scheduled for February 1 to review the implementation of the latest oil production cuts.
