With traders being cautious as they kept an eye out for potential supply disruptions due to military hostilities between Israel and the Palestinian Islamist organization Hamas, crude oil prices fell by -0.32% to 7161. As the skirmishes stoked concerns that the violence would move outside of Gaza, Brent and WTI both increased by more than $3.50.
While Israel hammered the Gaza Strip on Tuesday with the heaviest airstrikes in its 75-year history of hostilities with the Palestinians, Hamas launched the strongest military assault against Israel in decades on Saturday. The effects of the current crisis in the Middle East on geopolitics are yet quite unclear.
Due to Israel’s low crude oil production, the most recent events there don’t represent an imminent threat to the oil supply. However, if the confrontation lasts for a long time, there is concern that tighter sanctions against Iran and potential interruptions to Iran’s oil supply will have a greater effect on oil markets.
The weekend attacks in Israel did not have a significant direct impact on the near-term oil market inventories, according to Goldman Sachs (NYSE:GS). It did, however, add that the attacks lessen the possibility that the nation’s relations with Saudi Arabia will return to normal and that Saudi production will not eventually increase as a result.
