Oil prices jump amid Middle East conflict
Oil prices rose more than 4% in early Asia trade with analysts warning of more volatility due to the Israel-Hamas conflict in the Middle East.
Both Brent and US crude, or WTI, moved higher on Monday with prices already supported by supply concerns amid output cuts by Saudi Arabia. Meanwhile, the Baker Hughes total rig count fell further to 619 last Friday, while the number of oil rigs in operation fell by five to 497, a new 19-month low. IGTV’s Angela Barnes has this round-up.
Conflict in the Middle East
The recent conflict in the Middle East has impacted markets, including the price of oil Even though Israel and Palestine aren't big oil producers, their conflict has caused concerns because they are situated in an important oil-producing region. As a result, the price of oil has shot up by over $4 in early Asian trade after the attack on Israel.
The price of crude oil
In the United States, the price of crude oil has increased by 3.43 percent, currently trading at around $84 per barrel. Similarly, Brent crude oil has seen a rise of 3.25 percent, reaching approximately $86 per barrel. These prices are slightly lower than the recent peak of $90 per barrel observed in the past few weeks. Despite these fluctuations, the prices of crude oil remain high due to low global oil inventories and ongoing production cuts by Saudi Arabia.
The drop in oil prices
The drop in oil prices from their recent peak can be partly attributed to the reduction in the total number of oil rigs being used by Baker Hughes. Last week, the number of oil rigs in operation fell by 5 to 497, reaching a new 19-month low. This decrease in rig count indicates a slowdown in drilling activity, which could affect future oil production.
Production cuts by Saudi Arabia
It's important to note that while the conflict in the Middle East has had an impact on oil prices, other factors like global oil inventories and production cuts by Saudi Arabia have also played a significant role. The market's response to the conflict demonstrates how sensitive it is to geopolitical events in important oil-producing regions, highlighting the interconnectedness of global commodity markets.
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