Oil prices increased by approximately 3%, reaching the highest level of the week. Investors are concerned about the expansion of conflict in the Middle East, which could disrupt global crude oil supplies.
Brent crude futures settled at $90.48 per barrel, up $2.55 or 2.9%, while US West Texas Intermediate crude settled at $85.54 per barrel, up $2.33 or 2.8%.
Brent’s premium to WTI reached its highest since March, making it more attractive for energy companies to export crude oil by sending ships to the United States.
During the week, Brent crude fell 2%, and West Texas Intermediate crude dropped 4%.
The recent developments did not have a direct impact on the oil supplies. However, there is a growing concern that the conflict in Gaza might spread and disrupt the supply chain from Iran, which is the primary crude oil producer and supports Hamas. In case of a broader war, there could be a significant impact on oil shipments from major Gulf producers such as Saudi Arabia, the world’s largest oil exporter.
Goldman Sachs analysts have maintained their forecast for Brent crude prices in the first quarter of 2024 at $95 per barrel. However, they noted that the decrease in Iranian exports could cause core prices to increase by approximately 5%.
