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MNI Commodity Weekly: Middle East Geopolitical Threat Persists for Oil Markets

  • Middle East Geopolitical Threat Persists for Oil Markets: Middle East flashpoints begin to exert an upside on oil prices in early 2024 with the risks of escalation and wider regional conflict remaining a concern.
  • Oil Markets: Houthi rebel attacks on vessels passing the Red Sea sustain, along with overall escalating Middle East tensions which have supported oil Wednesday. Libyan production concerns at the Sharara field provide further upside. Fears over weaker than expected rate cuts by the Fed this year weighed to the downside earlier this week.
  • Gas Markets: Cooler weather remains the main upside risk to global natural gas markets. European natural gas prices are trading below levels seen in most of December as high storage levels and sufficient supplies weigh on prices, while cold weather and tensions in the Middle East are supportive to the upside. US natgas prices remain below late-December highs but forecasts for colder weather are supporting prices this week.

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