Crude Oil Jumps over 4 percent as Hamas-Israel Tension Flares Up
Crude Oil Futures opened more than 4 percent higher on Monday after the Hamas attack on Israel during the weekend. Israel has warned Gaza residents to leave as it will retaliate with a well-planned and strong military operation in the region. Oil prices have jumped as supply could be disrupted in the near future. Additionally, Saudi Arabia and few Arab nations have announced their plan to stick to oil production cuts. Saudi Arabia has been pushing for reduction in production to keep prices higher.
Oil prices declined last week as demand concerns grew. Last week was the worst weekly performance of crude oil in the last few months. But, the recent events in the Middle East could lead crude prices back towards $90 levels. The price action would largely depend on how Israel proceeds with the situation. Israel has said that the country is at war.
The war in Israel could have a short to medium term impact on oil prices. It is yet to be seen how long Israel will take to manage Hamas. Geopolitical analysts believe that Hamas has collected strong arsenal to give a tough fight to Israeli forces. Hamas leaders would have expected retaliation from Israel after surprise attack.
The recent events will have a lasting impact on Middle East diplomacy. Israel was working a peace agreement with Saudi Arabia but the recent activities could put those plans on hold.
The closing of crude oil today would determine the future course of action on Crude Oil prices. The demand has surely reduced but short term supply issues could take it higher.