© Reuters. FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
By Alex Lawler
LONDON (Reuters) -Oil steadied on Thursday, largely unwinding an earlier rally, as concerns over Middle Eastern supply and disruptions at an oilfield in Libya were countered by concern about economic growth and demand.
Local protests forced a production shutdown on Wednesday at Libya’s Sharara oilfield, which can produce up to 300,000 barrels per day (bpd). The field, one of Libya’s largest, has been a frequent target for political protests.
fell 30 cents, or 0.4%, to $77.95 a barrel by 1450 GMT, after earlier rising over $1. U.S. West Texas Intermediate crude futures rose 26 cents, or 0.4%, to $72.96.
” traders have started the year on a cautionary note with global growth and demand worries offsetting rising geopolitical risks related to developments in and around the Red Sea,” said Ole Hansen of Saxo Bank.
Downbeat economic data weighed. Euro zone business activity shrank in December. German inflation rose, possibly offering the European Central Bank an argument in favour of keeping interest rates steady for some time.
Both oil benchmarks gained about 3% on Wednesday to settle higher for the for the first time in five days. Oil also found support from American Petroleum Institute data showing crude stocks fell by 7.4 million barrels, double the expected drawdown.
Though the API also reported rising product stocks, “it is likely that oil watchers will concentrate on the 7.4 million barrel draw in crude inventory because of Libya and the rekindled war premium”, said John Evans of oil broker PVM.
On Wednesday two explosions killed nearly 100 people and wounded scores at a ceremony in Iran to commemorate commander Qassem Soleimani, who was killed by a US drone in 2020. Iran has vowed revenge.
Shipping concerns in the Red Sea lingered after Yemen’s Iran-backed Houthis on Wednesday said they had “targeted” a container ship bound for Israel. U.S. Central Command said the militant group had fired two anti-ship ballistic missiles in the southern Red Sea the previous day.
Official inventory figures from the U.S. Energy Information Administration are due at 1600 GMT.
This story originally appeared on Investing
