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Oil Soars as Middle East Conflict Intensifies, Stocks Drop
Oil Soars as Middle East Conflict Intensifies
Oil prices soared on Tuesday as heightening tensions between Israel and the Palestinian group Hamas sparked fears of a wider conflict in the Middle East.
Brent crude futures, the international benchmark, were up 5.4% at $86,22 a barrel.
The surge came after Hamas launched a surprise rocket attack on Israel, killing at least one person and wounding dozens more in a major escalation of tensions between the two sides.
In response, Israel launched airstrikes on targets in Gaza, killing at least two people and wounding dozens more.
The conflict sent shockwaves through global markets, with stocks falling sharply on the news. The Dow Jones Industrial Average dropped more than 500 points, while the S&P 500 and Nasdaq Composite both fell more than 2%.
At the same time, safe-haven assets such as gold and the US dollar rallied as investors sought shelter from the rising tensions in the Middle East.
The spike in oil prices could put pressure on the global economic recovery as higher fuel costs would make it more expensive to transport goods and services. It could also lead to higher inflation and higher interest rates.
Analysts said the conflict could further disrupt global oil supplies, especially if it spreads to other parts of the Middle East. The region is home to some of the world’s largest oil producers, including Saudi Arabia and Iraq.
But traders are also keeping a close eye on rising production from US shale producers, which could help offset any losses due to the conflict.
Conflict Israel and Palestine
Oil prices surged on Monday as tensions between Israel and the Palestinian militant group Hamas escalated, sparking fears of a wider conflict in the Middle East.
Brent crude futures, the international benchmark, rose 5.8%, or $3.55, to $86,22 a barrel.
The jump in oil prices came after Hamas launched a surprise attack on Israel over the weekend as the ongoing conflict in the region intensified. The Palestinian militant group, which controls the Gaza Strip, fired a barrage of rockets at Jerusalem, sparking a retaliatory attack from the Israeli military.
The sudden increase in tensions raised worries of a further escalation of violence in the region, which could lead to disruption of oil supplies from the Middle East.
The jump in oil prices weighed on global stock markets, with the U.S. S&P 500 and the Nasdaq Composite both down more than 1%. European stocks also fell, as investors flocked to safe-haven assets such as gold and the Japanese yen.
The situation in the Middle East is being closely watched by oil traders, as any disruption of oil supplies from the region could have a dramatic effect on the global oil market.
Oil price surged
Oil prices surged on Monday, surpassing $86 a barrel for the first time since November, as the conflict between Israel and Hamas sparked fears of a wider Middle East conflict.
Brent crude rose 5.6% to a high of $86 a barrel, its highest level since November 2020.
The jump in oil prices came after Hamas, the Palestinian militant group, launched a surprise attack on Israel, prompting fears that a wider conflict between Israel and other countries in the region could follow.
Also contributing to the increase in oil prices was an announcement on Tuesday that the US would be sending two aircraft carriers to the Middle East in response to the conflict.
The spike in oil prices weighed on stock markets, however, with all major Asian indexes closing lower. In Europe, London’s FTSE 100 dropped 0.7%, Germany’s DAX fell 1.2%, and France’s CAC 40 closed 0.9% lower.
In the US, the Dow Jones Industrial Average was down 0.8%, the S&P 500 dropped 0.7%, and the Nasdaq Composite lost 0.5%.
The US Federal Reserve is set to announce its latest policy decision later on Wednesday, and investors will be watching closely to see what clues it gives about the state of the economy.
The information provided in this article is for informational purposes only and should not be considered as investment advice. The stock market can be volatile, and investing in stocks carries risks. Always do your own research and consider consulting with a financial advisor before making any investment decisions.