Brent climbs 5.5% amid Middle East tensions
International benchmark rose 5.5% on Monday away from five-week lows amid growing geopolitical tensions in the Middle East after the heavy military attack launched by the Islamist Hamas group on Israel during the weekend.
Brent Price
Brent rose 5.5% to $88.95 a barrel, from the opening of $86.42.
Brent rose 0.25% on Friday, the first profit in three sessions away from August 29 lows at $83.49 a barrel.
Global oil prices lost 8.5% in average last week, the second weekly loss in a row, and the steepest since March.
Geopolitical Tensions
Tensions flared in the Middle East as Hamas launched a surprise attack on Israel, resulting in one of the bloodiest days in the country's history.
Hamas launched thousands of rockets into Israeli territory, stormed many towns and gathered many hostages, with Israel retaliating with quick devastating attacks on the Gaza strip.
The raid resulted in the death of nearly 1100 person so far from both sides, with the US announcing plans to send an aircraft carrier and 5000 soldiers to the region.
Oil Supplies
Both sides of the conflict aren't serious producers of the oil market as Israel only owns two oil refineries producing 300 thousand bpd.
Thus the current war isn't a direct threat to oil supplies, however it could develop and drag the US and Iran inside it, in turn threatening stability of supplies.
Iran, which was accused of supporting the raid, could potentially attempt to hurt crude supplies going through the Persian Gulf in retaliation against US-backed Gulf states.
Estimates
Commonwealth Bank's analysts said that for this conflict to have a sustained impact on the oil market, supplies must be affected.
Such a scenario will only materialize if Iran got involved directly into the conflict.
Oil surges 6% as geopolitical tensions flare in the Middle East
Global oil prices surged 6% on Monday as tensions flared in the Middle East, the source of a third of global crude oil production, after the surprise massive attack by Hamas on Israel during the weekend.
Oil prices continued to recover for the second session off five-week lows as markets follow the developments of the war going on currently near the Gaza border.
Global Oil Prices
US crude rallied 6.1% to $87.20 a barrel, after marking a session-low at $84.74, while Brent rallied 5.5% to $88.95 a barrel, with a session-low at $86.15.
US crude rose 0.3% on Friday, the first profit in three days away from a five-week low at $81.56 a barrel, while Brent rose 0.25% away from August lows at $83.49.
Global oil prices lost 8.5% in average last week, the second weekly loss in a row, and the steepest since March.
Geopolitical Tensions
Tensions flared in the Middle East as Hamas launched a surprise attack on Israel, resulting in one of the bloodiest days in the country's history.
Hamas launched thousands of rockets into Israeli territory, stormed many towns and gathered many hostages, with Israel retaliating with quick devastating attacks on the Gaza strip.
The raid resulted in the death of nearly 1100 person so far from both sides, with the US announcing plans to send an aircraft carrier and 5000 soldiers to the region.
Oil Supplies
Both sides of the conflict aren't serious producers of the oil market as Israel only owns two oil refineries producing 300 thousand bpd.
Thus the current war isn't a direct threat to oil supplies, however it could develop and drag the US and Iran inside it, in turn threatening stability of supplies.
Iran, which was accused of supporting the raid, could potentially attempt to hurt crude supplies going through the Persian Gulf in retaliation against US-backed Gulf states.
Estimates
Commonwealth Bank's analysts said that for this conflict to have a sustained impact on the oil market, supplies must be affected.
Such a scenario will only materialize if Iran got involved directly into the conflict.
Gold rallies over 1% on Middle East tensions
Gold prices rose over 1% in European trade on Monday, extending gains for the second day and scaling a two-week high, as demand climbs on the precious metal due to mounting geopolitical tensions in the Middle East.
Such considerations overshadowed the odds of another US interest rate hike before the year end.
Gold Prices Today
Gold prices rose 1.25% to $1,855 an ounce, the highest since September 29, with a session-low at $1,832, after rising 0.7% on Friday, the first profit in ten days away from a seven-month trough at $1,810.
Gold was boosted on short-covering while dollar dipped against a basket of major rivals.
Gold nonetheless lost 0.9% last week, the second weekly loss in a row on the backdrop of higher US treasury yields.
Middle East Tensions
Tensions flared in the Middle East as Hamas launched a surprise attack on Israel, resulting in one of the bloodiest days in the country's history.
The raid resulted in the death of nearly 1100 person so far from both sides, with the US announcing plans to send an aircraft carrier and 5000 soldiers to the region.
US Jobs Data
The US economy added 336 thousand new jobs in September according to the payrolls report, beating estimates of 171 thousand easily.
The unemployment rate steadied at 3.8% last month, while average hourly earnings rose 0.2%.
Fed Remarks
During the weekend, Federal Reserve official Michelle Bowman said that inflation in the US remains too high and will likely require further policy tightening.
US Rates
Following the data and Fed remarks, odds for a 0.25% US interest rate hike in November rose to 22%.
Odds for a 0.25% interest rate hike in December stood at 36%.
The SPDR
Gold holdings at the SPDR Gold Trust fell 1.73 tonnes on Friday, the fourth decline in a row, to a total of 865.85 tonnes, the lowest since August 2019.
Euro gives up one-week high on geopolitical concerns
Euro declined in European trade against a basket of major rivals, giving up a one-week high against US dollar amid growing geopolitical concerns in the Middle East, with haven demand surging.
Euro opened the week lower after the attack launched by Palestinian military group Hamas on Israel during the weekend, in what was described as some of the bloodies days in the region in 50 years.
EUR/USD
EUR/USD fell 0.35% to 1.0547, with a session-high at 1.0574, after rising 0.35% on Friday, the third profit in a row, marking a week high at 1.0600, after mixed US labor data.
Euro rose 0.1% against the dollar last week, the first weekly profit in three months away from ten-month lows at 1.0448.
Geopolitical Tensions
Tensions flared in the Middle East as Hamas launched a surprise attack on Israel, resulting in the death of nearly 1100 person so far, with the US announcing plans to send an aircraft carrier and 5000 soldiers to the region.
The Dollar
The dollar index rose 0.2% on Monday on track for the first profit in four days against a basket of major rivals.
Markets are now buying up the dollar as a haven as the war in Middle East flares and investors shun riskier assets.
During the weekend, Federal Reserve official Michelle Bowman said that inflation in the US remains too high and will likely require further policy tightening.