Oil prices were above 87 dollars on international markets yesterday, reflecting investor fears that the conflict between Israel and the Palestinian group Hamas could spread across the Middle East and threaten supplies.
The end of last week was marked by fears that the accelerated pace of employment in the United States (U.S.) in September could prompt the central bank to raise interest rates again, which would mean weaker economic growth and demand for energy products.
Yesterday, traders’ attention focused on the attack by the Palestinian armed group Hamas on Israeli territory and on the response of the Israeli armed forces. The conflict has already claimed more than a thousand human lives and could spread to the entire region.
The relationship between supply and demand has remained the same, explains Tamas Varga from PVM, but “increasing tensions in the Middle East usually result in higher oil prices and this is happening now.”
“If Iran joins the conflict…”
Saudi officials reportedly told the White House on Friday that they are ready, as part of the agreement, to increase production next year. Saudi Arabia and Russia are currently planning to cut supply by the end of the year by 1.3 million barrels per day.
The question is how long oil prices will rise in the current circumstances, analysts say. Analysts warn that the conflict has opened up the question of the possible involvement of Iran.
“If Iran joins the conflict… up to three percent of the global oil supply is at risk. And if it expands and ultimately disrupts the transit through the Strait of Hormuz, it could ‘detain’ about 20 percent of the global oil supply,” explains energy analyst Saul Kavonic, N1 reports.
E.Dz.
