Oil prices jumped more than $4 a barrel in early Asian trade on Monday, as dramatic military clashes between Israeli and Hamas forces over the weekend deepened political uncertainty across the Middle East.
Brent crude rose $4.18, or 4.94%, to $88.76 a barrel by 0120 GMT, while U.S. West Texas Intermediate crude was at $87.02 a barrel, up $4.23, or 5.11%.
The surge in oil prices reversed last week’s downward trend – the largest weekly decline since March – in which Brent fell about 11% and WTI retreated more than 8% amid concerns about high interest rates and their impact on global demand.
Palestinian Islamist group Hamas on Saturday launched the largest military assault on Israel in decades, killing hundreds of Israelis and triggering a wave of retaliatory Israeli air strikes on Gaza that continued through Sunday.
“Increasing geopolitical risk in the Middle East should support oil prices … higher volatility can be expected” analysts from ANZ Bank said in a client note.
The eruption of violence threatens to derail U.S. efforts to broker a rapprochement between Saudi Arabia and Israel, in which the kingdom would normalise ties with Israel in return for a defence deal between Washington and Riyadh.
Source : Reuters
