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Oil prices surge! A new escalation in the Middle East looms on the horizon

01 Nov,2024
Oil prices surge! A new escalation in the Middle East looms on the horizon

- Oil prices continued to rise on Friday, jumping by more than a dollar per barrel to reduce their weekly losses, following reports that Iran is preparing to launch a retaliatory strike in the coming days ahead of the U.S. elections on November 5.

- Brent crude futures rose by $1.39, or 1.9%, to $74.20 a barrel. West Texas Intermediate crude also increased by $1.44, or 2.1%, reaching $70.70.

- OPEC+ may postpone the planned increase in oil production for December by a month or more, which supports oil prices.

- Despite the price surge at the end of the week, oil prices are headed for a weekly decline of more than 1%, struggling to recover after a 6% loss on Monday, as military tensions in the Middle East on October 26 did not disrupt energy supplies.

- All bets are off next week ahead of the U.S. elections and the Standing Committee of the National People's Congress meeting in China.

- The market's recovery will depend on who wins the U.S. election and what fiscal stimulus details, if any, emerge from the Standing Committee meeting. Vice President Kamala Harris and former President Donald Trump have differing views on Iran and Russia, which could lead to changes in U.S. policies towards oil producers.

- In China, manufacturing activity returned to growth in October for the first time in six months, indicating that stimulus measures are having an effect.

- U.S. gasoline inventories unexpectedly fell last week to a two-year low due to increased demand, the Energy Information Administration reported on Wednesday, while crude inventories also saw a surprise decline as imports decreased.

- The Energy Information Administration stated that the world's largest oil producer pumped a record monthly high of 13.4 million barrels per day in August.
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