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Crude oil futures posted consecutive gains on Tuesday, closing at their highest level in seven weeks, as attacks on ships in the Red Sea and Ukrainian drone attacks on Russia resurfaced markets. Oil and energy infrastructure.
A Ukrainian drone strike caused a fire in fuel tanks at an oil terminal in Russia’s southern port of Azov and Yemen’s Houthi rebels are believed to have sunk a second ship in the Red Sea, sending prices higher.
Separately, Israeli Foreign Minister Israel Katz warned that Israel was on the verge of making a decision to commit an all-out war with Hezbollah, despite U.S. diplomatic efforts to avoid a larger war.
“Everywhere you look, geopolitical risk factors are very high,” Phil Flynn of Price Futures Group said, according to Reuters. “We haven’t seen a significant impact on supply yet, but that could change quickly. “
Nymex front-month crude oil (CL1:COM) for July delivery has ended +1.5% To $81.57/barrel, front month August Brent crude oil (CO1:COM) closed +1.3% to $85.33 per barrel, the highest level for both benchmarks since April 30.
U.S. natural gas rebounds after four consecutive sessions of losses as front-month Nymex July natgas (NG1:COM) settles +4.3% to $2.909/MMBtu.
ETF: (New York Stock Exchange: Use), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI), (UNG), (BOIL), (KOLD), (UNL), (FCG)
New analysis from HSBC shows that U.S. shale drillers will increase oil production for another 3-4 years before stalling around 2028, dampening OPEC+ hopes of a faster decline in U.S. production growth.
Improvements in drilling and hydraulic fracturing technology will drive expansion and more than offset recent reductions in rig deployment, analysts at the bank wrote in a report titled “Underestimating the Danger of U.S. Shale Gas.”
The report said that U.S. shale oil field production will increase by about 400,000 barrels per day next year, followed by a slowdown in growth.
