Oil prices rose to the highest levels in two weeks after the tragic explosion in the main port of Lebanon, which rocked the Lebanese capital Beirut in panic, and raised concerns about the increase in tension in the region.
Short video clips circulated on social media and from there to news agencies, came out about red fires that appeared in the sky of Beirut yesterday, and the fire completely engulfed the port of Beirut. The authorities said that the cause of the fire was tons of explosive material that had been stored for the past 6 years at the port, and they had not immediately announced whether this was an accident or an attack.
Crude oil futures rose in post-market trading, especially with the American Petroleum Institute announcing its forecast for a decline in 8.5 percent of US crude oil inventories last week, and we await confirmation from official data throughout the day.
“Tensions are high, and this is what is driving the oil up,” says John Kildoff. “Apparently, there will be a strong drawdown from US oil stocks, supporting prices strongly.”
Lebanon is suffering under the weight of a severe economic and financial crisis, with the value of the Lebanese pound declining by more than 70% within months, causing the destruction of purchasing power, and casting many into the chasm of poverty and unemployment.
But there are still concerns about demand, with the outbreak of the Corona pandemic in the United States, to keep US oil in the range of $ 40 a barrel since the end of June. OPEC and allies announced last month that they would ease production restrictions in June. While cases of infection with the Corona virus reached 18 million.
The American Petroleum Institute report stated that American Cushing stocks increased by 1.63 million barrels last week, while distilled oil stocks increased by 3.82 million barrels, and gasoline stocks fell by 1.75 million barrels.
“We are now seeing a trend manifested in the oil market: the erosion of US oil stocks,” says Ton Venlon, of GF International. “This means that OPEC +’s decision to raise production is based on strong demand.”
In the past market, Pachin crude rose by $ 1.70 to become just 5 cents lower than NYMEX, the lowest drop since May.
While BP (LON: BP) BP reduced the PLC ADR (NYSE: BP) dividends for the first time in a decade, and now aims to accelerate the shift towards green energy, after what was caused by the Corona virus for business