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Oil prices soar as the Israel-Gaza tensions escalate, compounding concerns about oil supply. Brent crude surged to $93.32 per barrel, marking a 1% increase, while WTI reached $90.78 per barrel, reflecting a 1.6% rise, as of 05:04 GMT on Friday. These gains are driven by the anxieties surrounding geopolitical events and the ever-shifting supply-demand dynamics.
Geopolitical Anxieties Unleashed
The Israel-Gaza conflict has raised fears of a broader Middle East crisis, a region pivotal to oil production. Israeli Defence Minister Yoav Gallant’s recent remarks have further amplified concerns of an impending ground invasion in Gaza. Missile interceptions by the U.S. aimed at Yemen but potentially affecting Israel have escalated regional tensions, consequently increasing risk premiums for crude oil.
Read More: Oil Reserves Prices Swing as Russia Raises Levy Crude Exports (tradingcompass.io)
Tightening Supplies and Shrinking Inventories
Oil Prices Soar Amid Israel-Gaza conflict and Ongoing Supply Cuts: Beyond geopolitical concerns, supply cuts from major producers such as Saudi Arabia and Russia are maintaining market tightness. These cuts, slated to continue through the year’s end, are propping up oil prices alongside dwindling inventories, notably in the United States. Washington’s plan to secure 6 million barrels for its Strategic Petroleum Reserve in December and January underscores the urgency of bolstering emergency stockpiles. This is driving Brent and WTI futures higher.
OPEC+ and Market Worries
Although the U.S. has temporarily eased sanctions on OPEC member Venezuela, this policy adjustment has not alleviated market apprehensions. OPEC+ sources suggest any increase in Venezuelan production would be gradual, offering limited immediate relief to the tense oil markets.
Oil Prices Soar: Short-Term Bullish Outlook
With escalating geopolitical risks and supply constraints, the short-term oil market outlook remains bullish. Should WTI break the $92.48 resistance, it could target late-September highs of $95.03 per barrel, indicating a promising path for further gains.
Market Metrics on Oil Prices Soar
Light Crude Oil Futures are currently trading at $89.33, surpassing both the 50-day moving average of $85.79 and the 200-day moving average of $77.97. It stands slightly higher than the previous daily close of $88.37.
With sturdy support at $88.21 and a major support level at $83.68 acting as robust foundations, along with minor and major resistance levels at $92.49 and $97.67, respectively, the market exhibits a bullish short-term stance.
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Disclaimer:
Please note that this article serves solely for informational purposes. As such, it is not financial advice. We strongly advise readers to conduct thorough research and consult with financial professionals before making any investment decisions.
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