OIL PRICES SURGE AFTER GAZA HOSPITAL ATTACK PROMPTS GLOBAL CONCERN

Wed 18 October 2023:

Fears that the conflict between Israel and the armed Palestinian group Hamas could extend to other Middle Eastern nations and disrupt the world’s energy supply caused a dramatic spike in oil prices globally on Wednesday.

Following an apparent missile strike on a hospital in Gaza City that claimed hundreds of civilian lives, including physicians, patients, and those seeking refuge, markets all over the world began to factor in risk premiums.

Brent crude futures advanced nearly 3%, to $92.50 per barrel, while US West Texas Intermediate crude (WTI) futures surged over 3% to $89.27 a barrel. Both benchmarks gained more than $2 per barrel to touch their highest levels in two weeks during the session.

Apart from geopolitical tensions, oil prices were pushed higher by other factors, including US crude stocks that dropped by nearly 4.4 million barrels in the week ended October 13, much steeper than the 300,000 barrel drop that analysts had projected.

Moreover, faster-than- expected growth of the Chinese economy in the third quarter, along with the latest waves of policy measures are expected to bolster a potential recovery, inevitably generating demand from the world’s second-largest economy.

Chinese oil refinery throughput in September hit a record daily rate, up 12% versus a year earlier, as refiners raised run rates to meet strong demand for transport fuel over the Golden Week holiday and recovering manufacturing activity.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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