Gasoline prices may not spike alongside oil, says analyst
The Hamas attack on Israel shocked the world, but didn’t trigger the big rally that some traders may have expected in a market that saw oil prices at their highest levels of the year less than two weeks ago.
In Monday trading, the front-month November contract for U.S. crude benchmark West Texas Intermediate oil CL.1, +4.46% CLX23, +4.46% climbed $3.35, or 4.1%, to $86.14 a barrel on the New York Mercantile Exchange, poised for the highest finish since Oct. 3, FactSet data show. Prices had settled at a more than one-year high of $93.68 on Sept. 27.
Analysts have also raised worries that the conflict will impact U.S. relations with Saudi Arabia, which had been showing recent signs of softening.What happened? Over the weekend, Hamas, the Palestinian militant group that controls the Gaza Strip, launched an attack from Gaza on Israel, leading the Israeli military to launch a wave of attacks on Gaza. More than 700 Israelis have been confirmed dead and least 560 Palestinians have been killed, according to a report from The Wall Street Journal.
50th anniversary of Yom Kippur The surprise Hamas attack on Israel brings back memories of the Yom Kippur War between Egypt, Syria and Israel, which happened 50 years ago in October 1973. The first oil crisis came after years of struggle between the oil companies that produced most of the oil in OPEC nations and their governments, with taxation, control and ownership contested, he said. In 1973, the oil market was already very tight after years of soaring demand, and the loss of oil supply combined with uncertainty about the duration of the war saw panic buying in oil, he said.
Iranian crude production has topped 3 million barrels a day and oil exports are approaching 2 million barrels a day, The Wall Street Journal reported in late September, citing numbers from analysts. The U.S. had been backing away from some actions that were meant to stop Iran’s oil shipments, with negotiations between Washington and Tehran leading to the release of five American detainees who were imprisoned in Iran.
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