Oil Prices Surge Amid Israel-Hamas Conflict

Oil Prices Surge Amid Middle East Tensions

---

In Tokyo on October 24th, oil prices experienced a positive uptick during early Asian trade hours. This recovery follows a previous day's dip in prices, driven by concerns about the ongoing Israel-Hamas conflict potentially escalating into a broader conflict in the oil-exporting Middle East region, which could lead to supply disruptions.

Brent crude futures saw an increase of 70 cents, marking a 0.8% rise to reach $90.53 per barrel by 0032 GMT. Simultaneously, U.S. West Texas Intermediate crude futures also gained 71 cents, or 0.8%, reaching $86.20 per barrel.

Yuki Takashima, an economist at Nomura Securities, explained, "The market is up as an adjustment following a decline over the past two sessions and due to persistent concerns about potential supply disruptions in the Middle East."

On the previous day, both benchmark crude prices had fallen by over 2%. This drop was attributed to intensified diplomatic efforts aimed at containing the Israel-Hamas conflict, which had led to some relief among investors regarding supply disruptions in the world's primary oil-supplying region, the Middle East.

Notably, on Monday, Hamas announced the release of two Israeli women who had been among the more than 200 hostages taken during its rampage in southern Israel on October 7th. Additionally, there were reports that the U.S. had advised Israel to refrain from a ground assault in the Gaza Strip.

Despite these developments, Israel continued its airstrikes on Gaza on Monday, following overnight air strikes in southern Lebanon.

The situation remains dynamic, and as Yuki Takashima pointed out, "We expect WTI to remain within the $80-$90 range for some time, with close attention on the Israel and Gaza situation, OPEC production, the pace of demand recovery in China, and U.S. inventory data."

A preliminary Reuters poll conducted on Monday suggested that U.S. crude stockpiles were likely to have increased last week, while distillate and gasoline inventories showed a decline. Reports from the American Petroleum Institute are expected at 2030 GMT on Tuesday, and the Energy Information Administration's data, the statistical arm of the U.S. Department of Energy, is due at 1430 GMT on Wednesday.

Source: Reuters (Reporting by Yuka Obayashi)