Oil prices rise as the Israel-Iran conflict enters seventh day
Oil prices rose on Thursday as Iran and Israel continued to bomb each other through the night, with the world waiting to see US President Trump’s decision on joining the conflict.
Brent futures rose 0.5% to $77.06 a barrel as of 09:13 GMT, while US West Texas July futures rose 0.7% to $75.68 a barrel.
Brent surged to a five-month high recently at $78.50 when Israel first started its airstrike campaign.
Now the conflict has entered its seventh day on Thursday, with Israel hitting Iran’s only nuclear energy facility, while an Iranian missile hit an Israeli hospital.
Goldman Sachs Expects a Higher Surge
Goldman Sachs said there’s a $10 premium in oil prices due to disruption to Iranian supplies and risks of an even wider disruption to regional shipping, which could send Brent above $90 a barrel.
US President Donald Trump said he still hasn’t decided on whether to join the conflict against Iran, which is keeping investors on edge.
Analysts have warned that striking Iran’s energy infrastructure would represent an existential threat to the regime and could send the conflict spiraling out of control.
The possibility of the closure of the Hormuz strait in particular is of a huge concern to many investors and could send oil prices to over $120 a barrel according to some analysts.
Iran is currently OPEC’s third biggest oil producer at 3.3 million bpd.
US Inventory Drawdown
The Energy Information Administration reported a sharp drawdown of 11.5 million barrels in US crude stocks last week to a total of 420.9 million barrels, while analysts only expected a drop of 1.6 million barrels.
Gasoline stocks fell by 0.2 million barrels to 230 million barrels, while distillate stocks rose 0.5 million barrels to 109.4 million barrels.
Important change in the UK interest rate vote process
The Bank of England revealed the tally of today's policy vote at the June 19 meeting, with 6 members voting in favor of holding rates steady, and 3 members voting in favor of a 0.25% rate cut.
The markets expected a bigger 7-2 margin in favor of holding rates steady.
