On Friday evening, crude oil prices increased by 5.5 percent. According to analysts, the prices of raw materials currently include “geopolitical risk” related to the Hamas attack and the Israeli military operation that has been ongoing for a week.
A barrel of WTI crude oil listed on the New York Stock Exchange cost $87.50 on Friday evening, after an increase of 5.54%. In turn, Brent crude oil on the London Stock Exchange cost USD 90.70 per barrel, i.e. about 5.5 percent. more than on Thursday.
Crude oil and the situation in Israel
“In crude oil prices, we have a premium of several dollars for the geopolitical risk related to the outbreak of war in Israel,” said Rafał Zywert, an analyst at the Reflex brokerage house, in a Friday comment.
As he noted, “at the moment, the market does not expect the conflict to escalate to such an extent that oil supplies from key producers in the Middle East will be disrupted.” “However, the International Energy Agency (IEA) assured that it is ready to take action in the form of a coordinated release of crude oil reserves if the war in Israel would lead to significant disruptions in oil supplies from the Middle East,” Zywert added.
Analysts of the industry portal e-petrol.pl also pointed out that last week the attention of investors on the oil market was focused on the situation in Israel.
“The risk of Middle Eastern destabilization at the beginning of the week resulted in a sharp increase in the price of Brent crude oil, which on Monday morning set local highs of $89 per barrel. In the following days, the commodity prices stabilized at high levels,” they noted.
Analysts explained that “Israel may not be a major producer of raw materials, but the risk of internationalization of this conflict is a threat to the entire region, which is of key importance for the stability of global oil supplies.”
On the day of Russia’s attack on Ukraine, February 24, 2022, a barrel of Brent cost $99 and WTI was valued at $92.8. At the peak of the increase, crude oil prices reached $130 per barrel in the USA and were close to $140 per barrel in Europe.
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