Oil price jumps as Hamas attack on Israel rattles markets – business live
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The oil price has jumped over 3% this morning as financial markets are rattled by the Israel-Hamas war:
Brent crude has jumped back to $89 per barrel this morning, recovering a chunk of last week’s losses, on fears that the surprise Hamas attack on Israel could escalate further, lifting tensions across the Middle East and hitting output from leading oil producers.
The risk of sanctions and oil supply shocks in the Middle East has driven up both gold and crude prices, reports Kyle Rodda, senior financial market analyst at Capital.com
Rodda adds:
The human impacts are far more consequential than anything happening in the markets, especially regarding the growing civilian casualties that have already occurred and are likely to increase as tensions escalate.
For those with open positions in the market, there could be ongoing volatility as the situation unfolds. Crude prices could be one barometer of the situation as instability in the region increases, impacting trilateral talks between Israel, the US, and Saudi Arabia and relations between the West and Iran.
🚨 Brent Crude Oil (3.86% up this morning) reacting on the war between Israel and Palestine. pic.twitter.com/Jq4AStJFyk
— Iwan Swiegers (@iswiegers) October 9, 2023
Hedge fund manager Pierre Andurand, argues that the oil market could tighten over time, but there is little immediate threat to supplies.
Writing in X (formerly Twitter), Andurand explained:
Many people asked me if the Hamas attacks on Israel will have an impact on oil prices. As the Levant is not a large oil producing region, it is unlikely to impact oil supply in the short term. And therefore one should not expect a large oil price spike in the coming days. But it could eventually have an impact on supply and prices.
Global oil inventories are low, and the Saudi and Russian production cuts will lead to more inventories draws over the next few months. The market will eventually have to beg for more Saudi supply, which I believe, will not happen sub $110 Brent.
Many people asked me if the Hamas attacks on Israel will have an impact on oil prices. As the Levant is not a large oil producing region, it is unlikely to impact oil supply in the short term. And therefore one should not expect a large oil price spike in the coming days. But it…
— Pierre Andurand 🇺🇦🌻🇫🇷🇪🇺 (@AndurandPierre) October 7, 2023
The US dollar has also strengthened, as risk sentiment weakens and investors rush into safe havens.
Wall Street is set to open lower, with the Dow Jones industrial average set to fall around 0.7%.
FUTURES RIGHT NOW
— 𝕏BT ビットコイン (@DogeXBT) October 9, 2023
S&P 500 DOWN 0.8% 📉
NASDAQ 100 DOWN 0.7% 📉
DOW JONES DOWN 0.7% 📉
VIX UP 7% 📈
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