Oil prices hikes by 1%, weekly increase anticipated as the Middle East conflict intensifies

By 1446 GMT, Brent crude futures had increased by 79 cents, or 0.97%, to $82.42 a barrel, while U.S. West Texas Intermediate crude futures had increased by $1.02, or 1.34%, to $77.24 a barrel.

Advertisement

As Israel turned down Hamas’ offer of a truce, tensions in the Middle East continued to rise on Friday, with oil prices expected to rise by over 7% on a weekly basis.

By 1446 GMT, Brent crude futures had increased by 79 cents, or 0.97%, to $82.42 a barrel, while U.S. West Texas Intermediate crude futures had increased by $1.02, or 1.34%, to $77.24 a barrel.

“It takes two to tango to reach a ceasefire deal in the Middle East and tensions in the region have not gone away,” UBS analyst Giovanni Staunovo stated.

With Israeli Prime Minister Benjamin Netanyahu’s denial of a Hamas ceasefire proposal on Wednesday, oil futures have now seen five days in a row of increases.

In other news, on Friday, Ukraine attacked two oil refineries in southern Russia with drones, causing the Ilsky facility to catch fire.

The other site targeted in the attack was the Afipsky refinery, located in Krasnodar Krai, which borders Crimea on the coasts of the Black and Azov seas.

“With the words that, ‘no part of the Gaza Strip would be immune from Israel’s offensive’, it was not hard for oil participants to conclude that without even a passing regard for peace, there was not enough conflict-premium priced in,” PVM analyst John Evans mentioned.

Due to a mix of technical problems at its refineries and drone assaults, Russia is selling more crude in February than it was supposed to under an OPEC agreement.

Following attacking Rafah, Gaza’s southern border city, on Thursday, Israeli forces resumed their deadly airstrikes on the Gaza Strip on Friday. This came following the previous session’s increase in oil prices of about 3%.

“Proof still needs to be provided that Russia is able to cut oil exports sufficiently even without weather-related constraints,” Commerzbank analyst Carsten Fritsch stated

In the meantime, the U.S. Treasury Department sanctioned three more United Arab Emirates (UAE)-based companies and one Liberian-registered vessel on Thursday for going against a price ceiling on Russian oil imposed by a coalition of Western countries.

Advertisement