Last week, oil contracts saw an increase of more than 1% for the second consecutive week.
The oil experiences a new drop this Monday, as investors’ attention continues to be focused on the situation in the Middle East. The intensification of diplomatic efforts to stop the conflict between Israel and Hamas keeps the market in suspense.
Thus, Brent crude oil futures registered a drop of 0.6%, standing at US$91.50 per barrel. Meanwhile, the futures of West Texas Intermediate (WTI) in the United States lost 0.9%, reaching US$87.36 per barrel.
Last week, Oil contracts rose more than 1% for the second consecutive week. This was due to fear of possible supply disruptions if the conflict between Israel and Hamas spread, which could affect the Middle East region, one of the largest sources of oil supply in the world.
Tamas Varga, an analyst at PVM, said: “The escalation of anger in the region will reinforce the headwinds for the economy. The possible increase in crude oil prices could push up global inflation, which could lead to a tightening of monetary policy and affect the growth of global oil demand.
Oil: how Israel’s war impacts
Meanwhile, Israel continued its attacks in Gaza, and also carried out airstrikes in southern Lebanon overnight. Despite this, Aid convoys managed to reach the Gaza Strip from Egypt over the weekend. However, a summit in Cairo did not produce a joint declaration, underscoring the complexity of the situation in the region.
Despite tensions in the Middle East, the threat of a reduction in oil supplies was mitigated last week when the United States suspended sanctions on OPEC member Venezuela after reaching an agreement with the opposition.
Additionally, oil production in Norway decreased to 1.64 million barrels per day in September, below the 1.79 million barrels per day in August and forecasts of 1.73 million barrels per day. These events continue to influence the global outlook for oil prices.
Source: Ambito
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