U.S. crude oil prices rose for the second consecutive week as Israel prepares to respond to recent attacks from Iran. This week, both the U.S. benchmark and the global benchmark, Brent crude, increased by over 1%. Since Iran launched ballistic missiles at Israel last week, oil prices have climbed more than 10% through Friday’s close.
Natasha Kaneva, head of global commodities strategy at JP Morgan, noted in a client update that maintaining positive price momentum in oil is challenging. She pointed out that without new factors to support it, the premiums tied to “war” and “stimulus” could easily diminish.
Friday’s Closing Energy Prices:
West Texas Intermediate (WTI)
November contract: $75.56 per barrel, down 29 cents (0.38%).
Year-to-date gain: over 5%.
Brent
December contract: $79.04 per barrel, down 36 cents (0.45%).
Year-to-date gain: over 2%.
RBOB Gasoline
November contract: $2.1516 per gallon, little change.
Year-to-date gain: over 2%.
Natural Gas
November contract: $2.632 per gallon, down 1.61%.
Year-to-date gain: over 4%.
Media reports indicate that Israel’s security cabinet met on Thursday to discuss the country’s response to Iran’s attack. Additionally, U.S. President Joe Biden and Israeli Prime Minister Benjamin Netanyahu held a phone conversation on Wednesday.
Traders are concerned that Israel may target Iran’s oil industry, which could lead to significant supply disruptions in the Middle East. Biden has advised Israel against attacking Iranian oilfields. Reports suggest that Arab Gulf states have also urged the U.S. to pressure Israel to avoid targeting Iranian energy infrastructure.
Helima Croft, head of global commodity strategy at RBC Capital Markets, mentioned in a client update that the U.S. might encourage Israel to strike refineries instead of oil export facilities. She argued that this approach would have a more direct economic impact on Iran. However, she cautioned that U.S. influence may have weakened since April when Israel’s response to Iran’s earlier missile and drone attacks was relatively restrained.
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