OIL
Brent oil prices continued to climb in early Wednesday trading, extending the substantial gains made during the previous session. The price per barrel has increased by more than 5% over the past 24 hours as traders factor in a heightened risk of an all-out war between Israel and Iran—a scenario that could severely impact oil supply from the Gulf region. The developments of the past week, culminating yesterday with Iran launching hundreds of missiles toward targets in Israel, have shifted the narrative in global oil markets. Previously, the focus had been on weakening global demand and a surge in output amid China's slowing economy and Saudi Arabia's plan to increase production in December. With Israel now expected to retaliate, the chances of further escalation are high, prompting a pivot in market sentiment from concerns over excess supply to fears of shortages. A full-scale Middle East conflict could significantly disrupt global oil trade by causing a supply shock. In this context, oil prices are likely to remain highly sensitive to developments between Tel Aviv and Tehran, with further price gains depending on rising tensions between the two nations.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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