Oil Prices Extend Uptrend as Geopolitical Risks Flare Up in the Middle East
Crude oil futures climbed further on Thursday amid rising concerns over potential supply disruptions from escalating conflicts in the energy-rich Middle East region. International benchmark Brent crude added 30 cents to trade at $90.78 per barrel while US benchmark WTI crude rose 25 cents to $86.46 per barrel at the close of the trading session.
Geopolitical worries fueled gains in the black liquid commodity after three sons of a prominent Hamas leader were killed in an Israeli airstrike earlier this week, threatening to derail ongoing ceasefire talks between the warring sides. Additionally, reports suggest the US and its partners have warned of imminent major missile or drone strikes by Iran or its proxies against Israel, keeping Middle East tensions elevated.
The threat of supply shocks helped offset some downward pressure from weakness in global economic outlook and rate hike expectations out of the US Federal Reserve meeting minutes. Traders are now pricing in higher interest rates to remain in place for an extended period to get inflation under control. However, analysts note crude oil remains sensitive to emerging risks in a volatile geopolitical hotspot that is home to over half of worldwide oil reserves.
Looking ahead, market participants will keep a close watch on monthly oil market reports from OPEC and IEA for latest projections on supply and demand balances. With no clear end in sight to geopolitical flashpoints, black gold seems poised to extend gains amid worries over supply crunch in the critical energy exporting region.
