The recent increase in tensions in the Middle East has had a significant impact on oil prices. There are growing concerns that Israel is on the verge of launching a ground invasion of Gaza, following the military's directive for over a million people in the region to flee south.
- West Texas Intermediate crude for November delivery climbed by $2.56 or 3%, reaching $85.46 per barrel.
- December Brent crude, the global benchmark, rose by $2.49 or 2.9% to $88.49 per barrel on ICE Futures Europe.
- November gasoline jumped by 3% to $2.23 per gallon, while November heating oil increased by 1.5% to $3.09 per gallon.
- Natural gas for November delivery fell by 1.6% to $3.29 per million British thermal units.
Oil prices have rebounded after a three-session decline, primarily fueled by developments in the Middle East. The Israeli military's evacuation order for around one million people in northern Gaza has garnered significant attention and speculation. Investors are closely monitoring the situation, which has triggered the recent surge in oil prices. ##| Israel warns of impossible evacuation in Northern Gaza
The recent escalation of violence in the Israeli-Palestinian conflict has raised concerns that Israel may be on the verge of a ground invasion. The United Nations has stated that an evacuation of nearly half the population of Northern Gaza, which Israel is reportedly ordering, would not only be impossible but also disastrous. Even the UN personnel on the ground have been advised to leave the area.
According to Ole Hansen, head of commodity strategy at Saxo Bank, oil markets are responding to this development. He mentioned that the ordering of the evacuation and Iran's support for resistance are contributing factors to the increase in oil prices.
Iran's Foreign Minister, Hossein Amirabdollahian, also weighed in on the situation. He indicated that Iran-backed Hezbollah militants in the area could initiate a new front if the siege of Gaza and attacks by Israel persist. Amirabdollahian made these remarks during a press conference in Beirut, asserting that every possibility and decision by other resistance groups is conceivable if war crimes and the humanitarian blockade continue.
The decision to evacuate comes approximately a week after Hamas launched a major attack on Israel, resulting in over 1,200 casualties. The conflict has already claimed the lives of more than 2,800 individuals from both sides.
Related Read: Iran's $6 billion funds reportedly still on hold under U.S.-Qatar agreement
Oil Prices Drop as U.S. Crude Inventories Surge
According to a recent report by the U.S. government, oil prices experienced a significant decline on Thursday. The cause of this downward trend can be attributed to two key factors: a substantial increase in domestic crude inventories and a record-breaking surge in U.S. oil production.
Surging Domestic Crude Inventories
The report revealed a startling rise of more than 10 million barrels in weekly domestic crude inventories. This surge in supply has undoubtedly impacted the market, leading to a notable decline in oil prices.
Record-breaking U.S. Oil Production
In addition to the increase in crude inventories, the report also highlighted that U.S. oil production has reached its highest level ever recorded. This surge in output further contributed to the downward pressure on oil prices.
Overall, these developments in both domestic crude inventories and U.S. oil production have had a notable impact on the oil market, resulting in a decline in prices. Keep a close eye on these trends as they continue to influence the industry.