Oil prices recorded weekly gains as the prospects for a truce in the war between Israel and Hamas diminish and Israel prepares to attack southern Gaza, increasing the geopolitical risk premium on the cost of crude.
The price of West Texas Intermediate crude oil rose to settle near $76 a barrel, extending its weekly rise to 6.3%. Prime Minister Benjamin Netanyahu rejected a potential truce and spoke of a military incursion into southern Gaza, where more than a million people have taken refuge. The military escalation adds new risks to oil flows in a region that produces about a third of the world’s oil supplies.
“Oil prices continue to be heavily influenced by developments in the Middle East and appear to be the most important concern,” Fouad Razaqzadeh, a market analyst at CityIndex and Forex.com, wrote in a note to clients, making futures prices “more likely than not.” Volatile.”
Oil prices are heading for weekly gains as tensions in the region escalate
Technical indicators highlight market strength. In the United States, the premium for gasoline over oil rose to its highest levels since September after inventories fell nationwide. On the other hand, traders are following Ukrainian drone attacks on Russian refineries, while a fire broke out in another Russian facility on Friday. The attacks sent diesel futures prices to their highest levels since November, and gas oil futures prices to their highest levels since October.
The escalating tensions in the main oil-producing region come at a time when Netanyahu said he saw “no other solution but complete victory,” and Iraq threatened to withdraw support for the US-led coalition. Meanwhile, Houthi attacks on commercial ships have escalated throughout the week, prompting major shipping companies to warn of the continued deterioration of the security situation in the Red Sea.
Shipping company chiefs warn of the continued deterioration of the situation in the Red Sea
Meanwhile, the European market saw buying during a key pricing period in the North Sea, indicating a stronger crude market in the region. This helped push the Brent spot spread, which measures near-term market prospects, to record its largest daily increase since October.
2024-02-10 02:30:09
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