Brent and WTI surge nearly 6% due to Middle East tensions, underscoring global oil market's sensitivity to geopolitical shifts. While Natural gas sees a 3.16% drop amidst complex global dynamics, including new U.S. sanctions and Chinese economic pressures.
Key Insights
Oil prices remained relatively steady on Friday, with both Brent crude and West Texas Intermediate (WTI) crude experiencing minor adjustments, yet poised for a nearly 6% weekly gain amidst ongoing Middle East tensions.
This is after Israel declined a ceasefire proposal from Hamas, escalating conflicts particularly around Rafah. The situation has introduced a conflict-premium into oil prices, underscoring the market’s sensitivity to geopolitical developments.
Despite the tensions, there has been no direct impact on oil production, even as non-OPEC countries like Norway and Guyana ramp up output and Russia’s exports exceed OPEC+ commitments due to refinery issues.
Additionally, new U.S. sanctions on entities and a tanker for breaching the Russian oil price cap, coupled with deflationary pressures in China, are influencing global oil price dynamics.
Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.