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Oil Majors Dive Into Deepwater Projects Despite Tight Budgets

Oil Majors Dive Into Deepwater Projects Despite Tight Budgets

Despite tightened budgets, frontier drilling…

Oil Prices Slip as Oversupply Concerns Trump Middle East Tensions

Oil prices struggled for direction and fell early on Tuesday, reversing Monday’s gains, as concerns about oversupply overshadowed the escalation of tensions in the Middle East.

As of 13:12 p.m. ET on Tuesday, the U.S. benchmark, WTI Crude, was trading slightly lower, by 0.63% at $74.29. The international benchmark, Brent Crude, was down by 0.76% at $79.45.

Oil prices continue to struggle for direction despite the escalation of tensions in the Red Sea and the wider Middle Eastern region, as supply remains ample.

U.S. and UK forces carried out a new round of attacks on targets in Yemen last night, taking out storage sites used by the Houthis, drones, and missile launchers.

The U.S. Central Command said eight strikes in total had been conducted around midnight on Monday.

The report noted that in addition to the U.S. and the UK, Australia, Bahrain, Canada, and the Netherlands also took part in the operation, contributing to activities such as surveillance and intelligence.

“Our aim remains to de-escalate tensions and restore stability in the Red Sea, but let us reiterate our warning to Houthi leadership: we will not hesitate to defend lives and the free flow of commerce in one of the world's most critical waterways in the face of continued threats,” the six countries said in a joint statement.

The flare-up in the Middle East, however, has failed to move oil prices much higher, due to market and traders’ expectations of sufficient oil supply this quarter.

In addition, Libya’s largest oil field is about to restart after a three-week outage, the country’s National Oil Corporation said earlier this week. 

Protesters shut down the 300,000-barrels-per-day oilfield in early January and said they would not let the NOC reopen it until their demands were met. Said demands focused on job creation for local communities and more infrastructure investment in the region. 

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By Charles Kennedy for Oilprice.com

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  • Mamdouh Salameh on January 23 2024 said:
    Where is your proof of oversupply concerns? I see npne

    But. I can clearly see deliberate manipulations of the global oil market by global oil traders, speculations and the United States in order to depress oil prices for the benefit of the US economy which is stagnating with less than 2.0 percent growth in 2023 and enable the US DoE to refill its SPR.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

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