BEIJING (Reuters) – Oil prices rose in early trading on Thursday, extending sharp gains from the previous day on concerns over supply in the Middle East following disruptions at a field in Libya and heightened tensions around the war between Israel and Gaza.
Brent crude rose 33 cents, or 0.42 percent, to $78.58 a barrel by 0101 GMT, while U.S. West Texas Intermediate crude futures rose 40 cents, or 0.55 percent. , at $73.10.
Both benchmarks rose about 3% to settle higher for the first time in five days on Wednesday, with WTI posting the biggest daily percentage gain since mid-November.
On Wednesday, local protests forced a complete shutdown of production at Libya’s Sharara oil field, which can produce up to 300,000 barrels per day. The field, one of the largest in Libya, has been a frequent target of local and broader political protests.
Also Wednesday, nearly 100 people were killed in explosions at an event commemorating Commander Qassem Soleimani, killed by a U.S. drone in 2020, as Iranian officials blamed unspecified “terrorists” and vowed revenge.
However, no group has yet taken responsibility for the attack. The United States saw no indication that Israel was behind the explosions, White House national security spokesman John Kirby said.
Swirling regional tensions due to the ongoing war between Israel and Hamas also continue to support oil prices.
On Tuesday, Hamas’ deputy leader was killed in a strike in Beirut – the first strike to hit the Lebanese capital in nearly three months of near-daily shootings between the Israeli army and the Iran-backed Hezbollah, confined to the border region.
Concerns about shipping in the Red Sea also remained after Yemen’s Iran-backed Houthis said Wednesday they had “targeted” an Israel-bound container ship. US Central Command said the militant group fired two anti-ship ballistic missiles into the southern Red Sea the day before.
The market was also supported by data from the American Petroleum Institute showing that U.S. crude inventories fell by 7.4 million barrels in the week ended Dec. 29, double the drop expected by analysts polled by Reuters.
However, gasoline inventories rose by about 6.9 million barrels, compared to a forecast decline of 200,000 barrels, and distillate inventories rose more than expected.
Weekly data from the Energy Information Administration, the statistical arm of the US Department of Energy, is due at 11:00 a.m. (16:00 GMT) on Thursday, delayed a day due to the New Year’s holiday on Monday.
Separately, the Organization of the Petroleum Exporting Countries (OPEC) said on Wednesday that cooperation and dialogue within the broader OPEC+ producer alliance would continue, after OPEC member Angola announced he would be leaving the bloc last month.
A meeting of the group has been announced for February 1 to review the implementation of its latest oil production cut.
(Reporting by Andrew Hayley; editing by Sonali Paul)
