WASHINGTON (dpa-AFX) - Reversing gains from the earlier in the session when it briefly hit above $100 a barrel, crude oil moved lower on Thursday as traders dissected yesterday's U.S. inventory data showing ample supply against production and supply disruption concerns arising due to the Middle Eastern war.
WTI Crude Oil for April delivery was last seen trading down by $0.18 (or 0.19%) at $96.14 per barrel.
Yesterday, the U.S. Energy Information Administration published a report showing that for the week ending March 13 crude oil inventories in the U.S. increased by 6.16 million barrels to 449.3 million. At the Cushing, Oklahoma delivery hub, crude oil inventories climbed by 944,000 barrels.
In the ongoing gulf war, Israel attacked Iranian facilities in the South Pars gas field. The facility, jointly shared by Iran and Qatar is highly crucial for the energy needs of Iran.
In its counterattack, Iran targeted Qatar's Ras Laffan industrial complex, housing the world's largest LNG facility.
According to a Reuters report, QatarEnergy shocked the world, announcing that it would take around three to five years to repair the extensive damage.
U.S. President Donald Trump warned Iran that he could 'massively blow up' South Pars if Iran attacks Qatar once more.
Nearly one-fifth of the world's LNG comes from Qatar, mainly from Ras Laffan. Ras Laffan supported 17% of the country's LNG exports. Capable of meeting global demand for nearly 12-plus years, the field holds nearly 1,800 trillion cubic feet of gas.
Japan, South Korea, and China rely heavily on Qatar's exports.
The United Arab Emirates has also halted operations at the Habshan gas facilities and Bab oil field after debris from the interception of Iranian missiles caused 'events.' The facility has been closed since earlier this month but the damage could delay the resumption of operations.
The spike in oil prices due to the closure of the Strait of Hormuz (a critical chokepoint in Arabian oil and energy transit) has been compounded by Israel and Iran trading attacks. Iran has only permitted a very small number of vessels from Iran-friendly nations to travel through the strait.
Iran also attacked the Samref refinery in Saudi Arabia's Red Sea coastal city of Yanbu though it resulted in very minimal impact.
Energy experts feel that there is enough room for oil prices to move higher if the strait is held closed for much longer time.
According to a Reuters report, Britain, France, Germany, Italy, and the Netherlands along with Japan condemned Iran for blocking the strait and have expressed their readiness to unify and ensure safe passage of vessels through the strait. No additional details on the scope and extent of their preparedness have been revealed.
A few ships linked to China, India, Pakistan, Iraq, and Malaysia were allowed safe passage after direct negotiations between those nations and Iran.
The International Energy Agency announced its member-countries have agreed to release nearly 400 million barrels from their respective strategic reserves. However, analysts view that the supply cannot adequately offset the disruption due to blockade to the strait.
Economic uncertainty prompted the U.S. Federal Reserve to hold interest rates steady on Wednesday. Other major banks are expected to follow suit.
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