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Oil prices were moving slightly higher after the Organization of the Petroleum Exporting Countries raised its demand forecast for 2023 on Monday.
Brent crude was up 0.1% to $81.52 a barrel, after OPEC raised its demand forecast to 2.5 million barrels a day this year, up by 100,000 barrels a day from last month's report. Earlier in the day, prices were down 1.2% at $80.44 a barrel.
OPEC said current negative market sentiment has been exaggerated, adding that the global economy and demand has been more resilient than first thought
Oil Moves Higher After OPEC Raises Demand Forecast
Bloomberg) -- Oil gained after Saudi Arabia and Russia reaffirmed they will stick with oil supply curbs of more than 1 million barrels a day through the end of the year.
Oil Advances After Saudi Arabia, Russia Reaffirm Supply Cuts
The prospect of more interest rate increases is fading, reducing fears of an economic contraction that would hurt demand for energy. Markets are also pricing faster rate cuts next year, which could be a tailwind for activity and demand.
Oil Futures Rise Amid Improving Economic Prospects
Tensions in the Middle East are keeping oil prices volatile. Daily price moves of more than 2% in either direction have become a common occurrence since Hamas' surprise attack on Israel last month.
On Tuesday the World Bank warned oil prices could surge to as much as $157 per barrel under a “large disruption” risk scenario spurred by a broadening conflict.
Oil jumps 2% ahead of Fed decision as Middle East turmoil continues
the Israel-Hamas war has yet to spill over into key oil-producing areas. Some refugees were allowed to flee the fighting in Gaza and cross into Egypt. The Qatar-mediated deal required agreement between Israel, Egypt and Hamas. US President Joe Biden called for a pause in fighting to free hostages being held in Gaza, but stopped short of supporting a full cease-fire
Oil Rises With Broader Markets as Fed Hints Rate Hikes Are Done
Tensions in the Middle East are keeping oil prices volatile. Daily price moves of more than 2% in either direction have become a common occurrence since Hamas' surprise attack on Israel last month.
On Tuesday the World Bank warned oil prices could surge to as much as $157 per barrel under a “large disruption” risk scenario spurred by a broadening conflict.
Oil jumps 2% ahead of Fed decision as Middle East turmoil continues
The World Bank is warning that even a small disruption to crude supplies due to escalating Middle Eastern conflict could remove between 500,000 and 2 million barrels a day from global markets.
Oil Could Jump Above $100 on Small Disruption, World Bank Warns
The report says high prices of oil and other commodities "would intensify food insecurity in the region and across the world."
“If a severe oil price shock materializes, it would push up food price inflation that has already been elevated in many developing countries,” said Ayhan Kose, the World Bank’s deputy chief economist.
In a “large disruption” scenario the global oil supply would fall by 6 million to 8 million barrels per day. That would drive prices up by 56% to 75% initially to between $140 and $157 a barrel, says the report.
The World Bank also describes a "medium disruption" risk scenario in which crude reaches $109 to $121 per barrel. In the case of a "small disruption" oil prices would increase to a range of $93 to $102 a barrel
Oil could surge up to a record $157 per barrel if the Middle East conflict broadens and creates a large disruption in the markets, the World Bank has warned.
The grim forecast is part of the institution's Commodity Markets Outlook, where it lays out three risk scenarios amid the ongoing war between Israel and Hamas and the continuing conflict in Ukraine.
Oil could surge to record $157 per barrel if Middle East turmoil spreads: World Bank
Oil Edges Higher After Giving Up War Premium on Shaky Demand
(Bloomberg) -- Oil edged higher after plunging more than 5% in the first two days of the week as a still-contained Israel-Hamas war caused attention to shift to a shaky global demand backdrop.
The rate at which consumption of natural gas is growing in Colombia, coupled with declining domestic production, which will accelerate due to Petro's ban on hydrocarbon exploration, will cause imports of the fuel to accelerate. This is placing greater pressure on Bogota to significantly increase the volume of LPG cargo being received by Colombia, threatening the balance of trade and energy security. It is predicted that the once energy-self-sufficient country will become a net importer of natural gas by 2030. Even recent natural gas discoveries will do little to expand domestic supply and alleviate the threat of an energy crisis while exacerbating existing economic weakness caused by a ballooning trade deficit
A series of recent natural gas discoveries in Colombia gave considerable hope of boosting domestic reserves and production. Among the most significant finds were the 2017 Gorgon-1 and 2022 Gorgon-2 deepwater discoveries in the COL-5 Block located offshore from Colombia's Caribbean coast. The block is operated by Shell, which holds a 50% working interest, while the remaining 50% is held by Ecopetrol. There are also the earlier 2015 Kronos and 2017 Purple Angel deepwater discoveries made near COL-5 Block. Another promising find occurred at the Uchuva-1 exploratory well, which was drilled in the offshore Tayrona Block by operator Petrobras, which holds a 44.44% working interest, with the remaining 55.56% controlled by Ecopetrol. While those discoveries demonstrate there is considerable potential in Colombia's territorial waters, in the Caribbean, it will be many years for they are developed.
Israeli Prime Minister Benjamin Netanyahu said during a televised speech that the country is in a battle for its existence, adding that he won’t explain the reasons for the timing of the planned ground assault. West Texas Intermediate rallied above $85 a barrel during the speech, reigniting a war premium that had essentially vanished this week.
Oil Rises as Israel’s Invasion Buildup Reignites War Premium
Traders have been ramping up bullish oil positions due to the conflict, with money managers increasing their bets on higher Brent crude prices by the most in seven years in the week through Oct. 17. Much of the most frenzied oil-trading activity in the last few days has been centered in the options market, with a record number of Brent calls changing hands over the past week.
such a scenario, even short-lived, could come with severe consequences for the global economy, Daco warned. The impact could include a mild global recession, global real GDP growth falling 1.4% through the end of next year, and the world economy shedding around $2 trillion in value.
The most severe outcome of the war is a "uncontained scenario," Daco said, where the war escalates and could ultimately see the involvement of the US or Iran, or both.
In that situation, oil prices could immediately spike by $50 a barrel, notching $150 a barrel in late 2023, Daco warned. Meanwhile, the VIX, a measure of market volatility known as the stock market's fear gauge, could see a severe spike, jumping at by at least 18 points.
Soaring oil prices and market volatility are likely in the most extreme version of the Israel-Hamas conflict.
In an "uncontained" scenario, oil prices could notch $150, EY's chief economist estimated.
Meanwhile, the stock market's fear gauge could spike 18 points as volatility soars.
Oil prices could surge well into to the triple-digits and market volatility could skyrocket in the most severe scenario of an uncontained Israel-Hamas war, according to EY chief economist Greg Daco.
Oil prices would soar to $150 and market volatility would skyrocket in the most severe scenario for the Israel-Hamas war, EY chief economist says
We expect WTI to move within the $80-$90 range for a while, with all eyes on the situation in Israel and Gaza, OPEC production and the pace of demand recovery in China," Takashima said, adding investors were also focusing on U.S. inventory data.
U.S. crude stockpiles were expected to have risen last week, while distillate and gasoline inventories fell, a preliminary Reuters poll showed on Monday.
TOKYO (Reuters) - Oil prices rose in early Asia trade on Tuesday, recovering some of the previous day's losses, as investors remained nervous that the Israel-Hamas war could escalate into a wider conflict in the oil-exporting region, causing potential supply disruptions.
Reuters
Oil prices rebound on Israel-Hamas war uncertainty
Oil prices were climbing Friday amid growing tensions in the Middle East driven by the ongoing Israel-Hamas war.
West Texas Intermediate was up 1.4% percent to $90.60 a barrel, while Brent crude jumped 1.3% to $93.57.
In the latest developments, a U.S. Navy warship shot down missiles appearing to head toward Israel Thursday and American bases in Iraq and Syria were repeatedly targeted by drone attacks, the Associated Press reported.
TheStreet.com
Oil prices climb as Mideast tensions increase and geopolitical risks soar
The risks of a wider war in the Middle East will likely lead to extensive efforts by the West to cover any shortfalls or disruptions of crude outflows,” Moya said. “Venezuela won’t be able to ramp up output to meaningful levels, so whatever oil-price relief we are seeing should be temporary.”
Oil’s afternoon rally was also bolstered by a broader risk-on sentiment. Financial markets interpreted Chairman Jerome Powell’s comments at the Economic Club of New York to say that the Federal Reserve is finished hiking rates, a more dovish stance than earlier communicated, Vital Knowledge found Adam Crisafulli wrote in a note to clients.
Oil Rises as Venezuela Deal Seen as ‘Band Aid’ Amid Mideast War
Oil jumps as Iran increases rhetoric against Israel, US stockpiles drop
OPEC plans no immediate action after Iran urges Israel oil embargo, sources say
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Economist Nouriel Roubini warned earlier this week that the impact of the Israel-Hamas conflict has yet to be fully priced into markets. So far, he said, investors are accounting for only a baseline scenario in which Israel occupies Gaza but that the conflict would remain otherwise contained.
Still, Roubini sees a potential for further downside risk if Iran and Lebanon get involved.
"If that were to be the case, of course the supply of oil from the Gulf gets disrupted and you get a spike in oil prices and then the economic impact would be huge," the economist said.
Oil prices jumped more than 4% Friday amid rising geopolitical tensions.
The US on Thursday sanctioned two shipping firms that it said broke the G7 oil price cap.
Markets continue to watch how the Israel-Hamas conflict unfolds in the Middle East.
Oil prices jumped on Friday amid swirling geopolitical tensions in Europe and the Middle East.