Biotech
Friday, June 28th, 2024 7:13 pm EDT
Key Points
- Rising Oil Prices Amid Conflict Fears: U.S. crude oil is on track for a third consecutive weekly gain, driven by fears of an escalating conflict between Israel and the Iran-backed militia Hezbollah, which could disrupt crude supplies. West Texas Intermediate (WTI) and Brent crude prices have both reached their highest levels in months.
- Current Energy Prices: As of the latest trading session, the August contract for WTI was at $81.60 per barrel, down 0.15%, but has gained 13.89% year to date. Brent’s August contract was at $86.50 per barrel, up 0.13%, with a 12.28% year-to-date gain. RBOB Gasoline and Natural Gas prices have also shown significant year-to-date increases.
- Potential Regional Impact: RBC Capital Markets highlights the risk of Hezbollah targeting Israel’s offshore gas operations and potential Israeli retaliation on Iranian oil facilities. There is also concern that Iran might attack tankers in the Strait of Hormuz or abandon its détente with Saudi Arabia to target the kingdom’s oil facilities, which could further threaten regional energy supplies and economic stability.
U.S. crude oil is set for its third consecutive weekly gain amid escalating tensions between Israel and the Iran-backed militia Hezbollah, heightening fears of a broader conflict in the region. On Friday, West Texas Intermediate (WTI) briefly surged to an intraday high of $82.72 per barrel, its highest level since April 30. Similarly, Brent crude reached $87.22 per barrel, marking a two-month high for the global benchmark. For the week, U.S. oil is up about 1.2% and has risen by 5.98% in June.
As of the latest trading session, the August contract for WTI was priced at $81.60 per barrel, a slight decrease of 12 cents or 0.15%, while Brent’s August contract was at $86.50 per barrel, up by 11 cents or 0.13%. Year to date, U.S. oil has gained 13.89%, and Brent has increased by 12.28%. RBOB Gasoline for the July contract was priced at $2.54 per gallon, down 0.15%, yet it has gained 20.9% year to date. Natural gas for the August contract was at $2.68 per thousand cubic feet, down 0.22%, but still ahead by 6.56% year to date.
The rising oil prices are largely attributed to the potential for military conflict between Israel and Hezbollah, which could have significant implications for crude supplies, particularly from OPEC member Iran. According to RBC Capital Markets, the Pentagon has already moved military assets closer to Lebanon in preparation for a possible evacuation of Americans, as fighting between Israel and Hezbollah intensifies. The U.S. State Department has also advised its citizens to reconsider travel to Lebanon due to the escalating situation.
RBC Capital Markets further warns that Hezbollah might target Israel’s offshore gas operations if war breaks out, and Israel could retaliate by striking Iranian oil facilities. There’s also concern that Iran might attack tankers in the Strait of Hormuz or abandon its détente with Saudi Arabia to target the kingdom’s oil facilities. Even if the détente between Iran and Saudi Arabia holds, there remains a significant risk to regional energy supplies and other crucial economic assets should the conflict spread beyond current borders. Helima Croft, RBC’s global head of commodity strategy, and her team emphasized this in a recent note to clients, highlighting the potential disruptions to regional energy supplies and the broader economic impact if hostilities expand.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/06/28/crude-oil-prices-today-wti-near-two-month-highs-on-israel-hezbollah-war-fears.html
