WTI crude oil prices in the U.S. rose over 5%, marking the third consecutive day of gains, fueled by ongoing tensions in the Middle East. This week, WTI oil has increased by more than 8%.
On the New York Mercantile Exchange, November delivery of West Texas Intermediate (WTI, Financial) crude closed up $3.61, or 5.15%, at $73.71 per barrel. The price has risen by over 8% this week.
The rise in oil prices is attributed to Iran's large-scale missile attack on Israel, prompting Israel to vow retaliation. The U.S. and its allies are preparing for potential Israeli retaliation against Iran. Despite the escalating conflict, global attention remains on when and how Israel will respond to Iran's missile attack that caused minimal damage, although both Israel and the U.S. have deemed Iran's actions unacceptable.
U.S. President Joe Biden's response to whether the U.S. would support strikes on Iranian oil facilities added uncertainty. His comments hinted at possible Israeli actions against energy infrastructure, boosting oil prices further.
In addition, Israel's ground actions against Lebanon have heightened uncertainty for investors. Israel intensified strikes in southern Lebanon targeting Hezbollah, with Beirut facing airstrikes. The Israeli Defense Forces announced strikes on Hezbollah's intelligence headquarters in Beirut, targeting personnel, command centers, and infrastructure. This location is a key intelligence hub for Hezbollah.
According to Claudio Galimberti, Chief Economist at Rystad Energy, the growing conflict in the Middle East raises the risk of oil supply disruptions. However, OPEC and its allies possess substantial spare oil capacity that could address any energy supply gaps.
