London
Oil prices surged by over $1 on Friday, indicating the potential for a second consecutive week of gains. Heightened concerns surrounding the Israel-Gaza conflict’s possible expansion in the Middle East have amplified worries about disruptions to the oil supply from the region, one of the world’s major producers.Brent crude futures rose to $93.61 a barrel, an increase of $1.23, while the U.S. West Texas Intermediate crude was at $90.60 a barrel, also up $1.23. The anticipated ground invasion by Israeli forces and an explosion at a Gaza hospital earlier this week have contributed to the oil market’s increased volatility and upward pressure on prices.Despite the lack of immediate changes in the supply dynamics, the possibility of an Israeli ground offensive has notably propelled oil prices upward. Analysts from Commerzbank emphasized the prevailing undersupply in the oil market, suggesting that oil prices are likely to remain well supported in the near term.Fears of the conflict’s potential broadening were compounded as the U.S. intercepted missiles fired from Yemen toward Israel, adding to the geopolitical tension in the region. Additionally, the forecasts of a wider deficit in the fourth quarter, along with ongoing supply cuts by major producers Saudi Arabia and Russia, have further bolstered oil prices.Meanwhile, the recent temporary lifting of U.S. oil sanctions on Venezuela is not expected to trigger immediate policy adjustments by the OPEC+ producer group. Market experts anticipate a gradual recovery in Venezuelan oil production, indicating that it may not significantly influence the global oil balance in the foreseeable future.
