The ongoing conflict between Israel and Palestine has further complicated the world’s already beleaguered fuel sector. The price of crude oil on the global market leaped by 2% during morning trading on Wednesday, October 18th, following reports of how hundreds died as a hospital in Gaza was blasted in an attack denied by both governments.
As of 8:10 AM (GMT), Brent crude futures went up by 1.7%, resulting in $91.45 per barrel. Meanwhile, West Texas Intermediate (WTI) crude saw an increase of around 1.9%, placing prices at $88.32 per barrel. Both fuel benchmarks also hit their highest in two weeks throughout the course of the trading day.
Many industry watchers fear that the ongoing geopolitical strife will severely hamper fuel supply and drive fuel prices to greater heights – worrying issues now given how winter is looming on the horizon.
Speaking for oil broker PVM, executive John Evans remarked that recent cancellations on the part of the Jordanian government regarding diplomatic maneuvers meant to serve as a multilateral/multinational consultation to resolve the conflict will also have their part to play in increased fuel prices.
This sentiment was echoed by analyst Vivek Dhar of the Commonwealth Bank of Australia. Dhar opined that a long occupation in the besieged area could drive Brent oil futures well over $100 per barrel. This is because the situation increases the risk of extending the conflict indefinitely, and could draw neighboring countries like Iran into the fray to further complicate matters.
But the ongoing conflict isn’t the only factor driving up the price of oil; a surprising shortfall in supply was also to blame.
Crude stocks in the United States dropped by around 4.4 million barrels as of Friday, October 13th – a much greater figure than the 300,000-barrel drop previously forecast by the American Petroleum Institute.