The situation in the Middle East escalates again, Brent crude oil breaks through 90 US dollars for the first time in half a year
Brent crude prices topped $90 a barrel for the first time since October as tensions in the Middle East threatened to escalate into a wider regional war. Reports indicate that Israel is on high alert due to the growing threat of Iranian attacks, and crude oil prices are reflecting the increased geopolitical risks. Iran has vowed retaliation for a recent Israeli attack in Syria that resulted in the death of a senior Iranian military official.
In response to the escalating situation, the United States issued a strong condemnation of Israel, with President Joe Biden demanding an immediate ceasefire in Gaza and urging Israel to prioritize the safety of Palestinian civilians and aid workers. The White House stated that future U.S. policy towards Gaza will depend on Israel’s actions in the coming days.
Furthermore, tightening global supplies and robust U.S. fuel demand have also contributed to the rise in crude oil prices. Front-month WTI crude oil futures for May delivery closed up 1.3% at $86.59 per barrel, while front-month Brent crude oil for June delivery closed up 1.4% at $90.65 per barrel.
Analysts warn that a direct conflict between Israel and Iran could potentially disrupt oil supplies from the Middle East, leading to further price increases. Citigroup analysts predict that Brent crude prices could reach $93-$95, but caution that this level may face resistance due to various factors, including the ongoing OPEC+ production cuts and potential disruptions in Iranian supplies.
However, despite the current bullish trend in oil prices, Citi remains cautious about the long-term outlook for oil prices in 2025. The financial institution forecasts a slowdown in demand growth as the aviation fuel sector struggles post-pandemic and electric vehicles gain popularity.
Overall, the financial community advises caution when investing in the stock market, emphasizing that the content, data, and tools in this article are for reference only and do not constitute investment advice. The volatile nature of the stock market underscores the need for careful consideration and risk management when making investment decisions.