Oil prices climb on strong demand, Middle East crisis
Sopuruchi Onwuka
The prices of crude at international commodity exchanges surged on Thursday as the International Energy Agency (IEA) agreed with rival Organization of Petroleum Exporting Countries (OPEC) that global demand for petroleum energy will remain string in the year.
The Oracle Today reports that supplies from African members of OPEC are in steep decline, output from the United States suffers disruption and Iran joins the fray in the Middle East crisis affecting key oil producing countries including Iraq.
The International Energy Agency (IEA) stated in its monthly report that it now expects oil demand to grow by 1.24 million barrels per day (bpd) in 2024, up 180,000 bpd from its previous projection; citing improved economic growth and lower crude prices in the fourth quarter.
The Executive Director of IEA, Fatih Birol, said he expects oil markets to be in a “comfortable and balanced position” this year despite Middle East tensions.
On its own, OPEC projects a demand growth of 2.25 million bpd this year, unchanged from its forecast in December, saying that oil demand is expected to rise by a robust 1.85 million bpd in 2025 to 106.21 million bpd.
The Oracle Today reports that oil trading logistic firms and traders hold strong concerns about safe passage of cargoes through the Red Sea where the United States and Britain contend with Iran-backed Houthi rebels that mount pirate attacks on international merchant vessels.
Attacks by Yemen-based Houthi militants against ships in the Red Sea have forced many companies to divert cargoes around Africa, adding to journey times and costs.
The U.S. on Wednesday conducted another round of strikes against Houthi targets in Yemen in retaliation for the attacks on shipping.
In the latest sign of escalating geopolitical tensions, Pakistan conducted strikes inside Iran, targeting Baluchi separatist militants, the country’s foreign ministry said, two days after Iranian strikes inside Pakistani territory.
Meanwhile, oil output fell by 650,000 to 700,000 bpd in top oil-producing U.S. state of North Dakota because of extreme cold weather, the state said.
U.S. domestic crude stockpiles rose last week by 480,000 barrels, according to market sources citing American Petroleum Institute figures.
