Oil Prices Soar After Hamas Operation in Occupied Territories

Date: 09 October 2023 - 21:45

News ID: ۱۲۰۱۲۲

NEW YORK (Dispatches) - Crude oil prices jumped by more than $4 earlier today amid continued fighting between Hamas and Israel that began on Saturday.
Brent crude was trading close to $88 per barrel in morning trade in Asia, and West Texas Intermediate was changing hands at over $86 per barrel, both up by over 3% from Friday’s close. By the time of writing, prices had retreated modestly, with WTI slipping below $86 per barrel.
The price surge follows the biggest operation on Israel in years, after in the early hours of Saturday Hamas fighters entered the country by.
Oil prices were quick to react to the deterioration in Middle Eastern security and will likely stay vulnerable to more wild swings as the situation develops.
“Increasing geopolitical risk in the Middle East should support oil prices... higher volatility can be expected” ANZ Bank analysts said in a note quoted by Reuters.
Goldman Sachs analysts, meanwhile, highlighted two more potential consequences of the latest clash between Israel and Hamas.
On the other hand, per a Wall Street Journal report, Saudi Arabia had indicated it was willing to consider rolling back production cuts next year if prices went too high. The report cited Saudi and U.S. officials as saying this, noting it was a marked departure on the part of Ryiadh from its attitude to U.S. calls for more oil production last year.

OPEC Says Oil Industry Needs $14 Trillion of
Investment By 2045

The world needs $14 trillion in cumulative investments in the oil sector by 2045 to ensure market stability and avoid energy and economic chaos, OPEC said in its annual World Oil Outlook on Monday.
The annual investments need to be around $610 billion on average, the bulk of which should go to the upstream segment, the cartel said, rebuffing calls for a halt in investments in new supply.
The cumulative investments in the upstream need to be around $11.1 trillion by 2045 or an average of $480 billion per year. Downstream and midstream requirements are estimated at a total of $1.7 trillion and $1.2 trillion by 2045, respectively.
“If these investments do not materialize, it represents a considerable challenge and risk to market stability and energy security,” OPEC said in the annual report, in which it also raised its long-term oil demand forecast to 116 million bpd in 2045, up by 6 million bpd from the demand for that year expected in the 2022 annual outlook.
“Ensuring that these investments are made and sustained is a key challenge and of utmost importance to the stability of oil markets and security of supply,” OPEC said in the 2023 outlook.
This year, upstream investment is set to rise by 13%, to $360 billion, but this will only bring capital expenditure back to pre-pandemic levels.
“Hurdles to upstream investment, or even calls to curtail investment, are not helpful in this regard, and raise the risk of supply shortfalls and market volatility,” the cartel warned.
OPEC Secretary General Haitham Al Ghais commented in the foreword to the report,
“Calls to stop investments in new oil projects are misguided and could lead to energy and economic chaos.”
“History is replete with numerous examples of turmoil that should serve as a warning for what occurs when policymakers fail to acknowledge energy’s interwoven complexities,” Al Ghais noted.