Oil prices jump 4% in light of Israel going to war
Currencies will fluctuate, and the price of oil has already increased. The prices of other goods and services will also increase. On today, 10/9/23, the price of gold increased by 0.97%, up $18.10; $1,$1862.90.
The blog and the channel are sad to announce that war is a time when investors earn massive profits. Invest as your conscious and heart allow. Below is the news article relating to the increase in oil prices.
As the Israel-Hamas conflict entered its third day following a surprise attack by Hamas on Israel, oil prices rose about 4% on Monday.
Brent crude futures rose 3.9% to $87.85 a barrel, while West Texas Intermediate futures rose 4.1% to $86.19.
Hamas launched a multi-pronged attack on Israel on Saturday morning during a major Jewish holiday, using paragliders to infiltrate via land, sea, and air.
NBC News reports that at least 700 Israelis have been killed, while the Palestinian Health Ministry records 313 deaths.
Crude prices are surging, but analysts believe this is a knee-jerk reaction.
Vivek Dhar, director of mining and energy commodities research at Commonwealth Bank, said, "In order for this conflict to have a lasting and meaningful impact on oil markets, there must be a sustained reduction in oil supply or transport."
Other than that, and as history has shown, positive oil price reactions tend to be temporary and easily trumped by other market forces. The conflict does not directly threaten any major oil source.
The oil industry is not a major player on either side. Israel has two refineries with a combined capacity of almost 300,000 barrels per day. According to the Energy Information Administration, the country produces virtually no crude oil or condensate. The Palestinian territories produce no oil, according to the Energy Information Administration.
The conflict, however, is located in a region that produces and exports oil to global markets.
The market is also concerned about oil-rich Iran.
"If Western countries link Iranian intelligence to Hamas, Iran's oil supply and exports will be at risk," Dhar said.
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“There are billions of dollars sitting in banks in Iraq and China and South Korea … that Iran cannot get its hands on due to the sanctions,”
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During the period between the end of 2022 and mid-2023, Iran's oil exports and production increased by some 600k barrels per day to 3.2 million barrels.
Conflict could spill over into the region, and there are concerns.
According to Eurasia Group's director of energy, climate and resources, Henning Gloystein, the conflict could also escalate regionally if Iran gets sucked into it.
Hezbollah said it attacked three sites in the Shebaa Farms, a strip of land between the Lebanese-Syrian border and Israel-occupied Golan Heights.
Josh Young, CIO of energy investment firm Bison Interests, forecasts "a pretty dramatic impact" on the oil market should the United States impose sanctions on Iranian exports.
Rapidan Energy Group President Bob McNally predicts a conflict between Israel and Iran could easily result in a $5 to $10 increase in oil prices if 40% of world exports go through the Strait of Hormuz. In addition to serving as a major oil transit route between Oman and Iran, the strait is considered the world's most important oil transit route.
Investing in Iran is not the only thing investors need to keep an eye on.
Similarly, McNally told CNBC's "Street Signs Asia" that crude prices could go "much higher" if Hezbollah gets involved.
He said oil prices would spike if the market believed the fighting would spread to Hezbollah in Lebanon.
Despite "limited firing" between Lebanon-based Hezbollah and Israel, U.S. Secretary of State Antony Blinken said the situation is currently quiet on Sunday.
