Crude Oil Prices Rise Amid Middle East Tensions
Crude oil prices experienced a notable increase on Tuesday, recovering from previous losses, primarily driven by supply concerns stemming from escalating conflicts in the Middle East, improved service sector data from the U.S., and reduced production at Libya’s Sharara oil field.
Brent crude oil futures rose by 97 cents, or 1.27%, reaching $77.27 per barrel. Meanwhile, West Texas Intermediate (WTI) crude oil futures climbed by $1.14, or 1.56%, settling at $74.08 per barrel.
On Monday, both benchmarks fell by approximately 1% amid a downturn in global stock markets. The decline in oil prices was somewhat mitigated by rising fears that Iran, a key Middle Eastern producer, might retaliate against Israel and the United States for the assassination of a Hamas political leader in Tehran, as well as an Israeli strike that killed a Hezbollah military commander in Lebanon, potentially triggering a broader regional conflict.
Just yesterday, at least five American personnel were injured in an attack on a military base in Iraq. It remains unclear whether this incident is linked to the threats of retaliation.
Market Analysts Express Concerns
According to Priyanka Sachdeva, a senior market analyst at Phillip Nova, “It appears that crude oil has regained some of its lost ground, as ongoing concerns about potential escalation of conflict in the Middle East continue to heighten anxiety in the oil market. The prospect of a comprehensive war in the region is becoming more tangible, threatening global supply chains.”
The U.S. government has urged countries to convey to Iran that escalation is not in its interest, as stated by a State Department spokesperson on Monday.
The rise in oil prices is further supported by new data indicating that activity in the U.S. services sector, which is the largest consumer of oil, remains robust.
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Global Oil Prices Recover from Four-Year Low
In July, crude oil prices experienced a resurgence after hitting a four-year low. This increase coincided with a broader rally observed in Asian capital markets, which had faced significant declines earlier in the week.
Impact of Libyan Oil Production Concerns
Concerns regarding a reduction in output from the “Sharara” oil field in Libya, which has a capacity of 210,000 barrels per day, are also influencing pricing trends. Production at this major oil site has dropped by approximately 20% due to ongoing protests.
Current Data Snapshot
The information is up to date as of 9:00 AM Bulgarian time.
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