Oil Prices Increase as Middle East Tensions Heated Up
Oil prices increased as Middle East tensions continue to be heated up by recent Iran attack on Israel. Based on antecedents, a slew of market analysts expect Israel to retaliate with diverge views on magnitude of damages on Iranian oil facilities.
Iran is one of the core members of OPEC+ and potential damage to the country’s output would mean a threat to the global supply. Recall that the OPEC+ has hint about maintaining status quo on oil output while seeking compliance with members.
Saudi Arabia is expected to pump more oil despite demand slowdown from the China, and uncertainties from the U.S even when the reduce Fed fund rates has lowered energy costs.
Brent rose to $78.03 per barrel on Friday in the global commodities market. US benchmark West Texas Intermediate (WTI) increased to $74.09 per barrel.
Oil prices had jumped higher after Iran fired around 180 ballistic missiles at Israel. US President Joe Biden said on Thursday that the US and Israel are discussing potential strikes on Iranian oil facilities after Tehran launched nearly 200 ballistic missiles at Israel.
Prices rallied around 5% following the news, which increased the likelihood of supply disruptions in the Middle East, home to the vast majority of oil reserves.
The US Energy Information Administration (EIA) released late Wednesday limited upward price movements, easing supply disruption worries.
US commercial crude oil inventories increased by around 3.9 million barrels during the week ending Sept. 27, against the market prediction of a 1.5 million barrels draw. Gasoline inventories also rose by about 1.1 million barrels during the same period.
Iran has vowed that its response will escalate if Israel retaliates for Tuesday’s attack, which it said was in response to Israel’s killing of Hezbollah Secretary-General Hassan Nasrallah, former Hamas political leader Ismail Haniyeh and Islamic Revolutionary Guards Corps commander Abbas Nilforoshan.
The extensive Israeli airstrikes on Lebanon continue amid border clashes between the Israeli army and Hezbollah. Further escalation is expected as the Israeli army announced ‘limited, localized’ ground raids in southern Lebanon. #Oil Prices Increase as Middle East Tensions Heated Up
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