The oil prices rose more than 3% this Monday, October 7, and Brent surpassed US$80 a barrel for the first time since August, amid fear of a broader conflict in the Middle East and a possible interruption of exports from the main crude oil producing region.
Brent crude futures rose $2.88, or 3.7%, to $80.93 a barrel. U.S. West Texas Intermediate crude oil futures gained $2.76, or 3.7%, to $77.14.
Brent rose more than 8% last week, while WTI soared 9.1% on the possibility of Israel attacking Iranian oil infrastructure in response to Iran’s missile attack on its territory on October 1.
“If that happens, oil prices could rise another $3 to $5 a barrel,” said Andrew Lipow, president of Lipow Oil Associates.
New axes of conflict in the war between Hezbollah and Israel
Rockets fired by Hezbollah, an Iranian-backed armed group, hit Israel’s third-largest city, Haifa, early Monday. Israel, for its part, seemed willing to expand its ground incursions into southern Lebanon in the first anniversary of the Gaza warwhich spread the conflict throughout the Middle East.
This raised fears that the United States, Israel’s superpower ally, and Iran get dragged into a broader war. ANZ Research, however, expects any immediate effect on supply to be relatively small.
“We see a direct attack on Iran’s oil facilities as the least likely response among Israel’s options,” he said, pointing to the buffer provided by the OPEC producer group of 7 million barrels per day of reserve capacity.
Oil: OPEC would increase its production in December
The Organization of Petroleum Exporting Countries (OPEC) and Its allies, including Russia, known collectively as OPEC+, will begin increasing production from December, after having reduced it in recent years to support prices due to weak global demand.
According to analysts, OPEC+ has enough excess oil capacity to compensate for the elimination of Iranian supplies by Israel, but would have difficulties if Iran retaliated by attacking the facilities of neighboring Gulf countries.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
