Oil prices surged by more than 1% on Wednesday after Hamas leader Ismail Haniyeh was killed in Iran. Israel launched an airstrike on Iran’s capital Tehran targeting Haniyeh and assassinating him instantly. The development potentially escalates the ongoing tensions in the Middle East leading to more causalities on both sides.
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The conflict between Israel and Palestine escalated after the October 2023 attack by the terrorist organization Hamas. Tensions have been rising since then with both nations launching air strikes against each other. Iran has shown its support to Palestine while the U.S. and other Western allies are backing Israel. The oil price has been hit since the conflict broke out leading it to remain on a slippery slope.
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Oil Prices Surge By More Than 1% After Hamas Leader Assassinated in Iran
Oil prices rose by over $1 a barrel on Wednesday and are up from its seven-week low. Brent crude futures climbed $1.39, or 1.8%, to $80.02 a barrel. Additionally, U.S. West Texas Intermediate crude futures rose $1.38, or 1.9%, to $76.11 a barrel.
The oil prices attract bullish sentiments with investors making the most out of the price run. The oil and gas sector could attract buyers before the tensions escalate leading to retaliation from Iran and Palestine.
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“I think putting it all together certainly raised the chances of escalation in the Middle East,” IG analyst Tony Sycamore said. He added, “Worth noting as well that after three straight weeks of declines, long positioning from speculative accounts in crude oil has been significantly reduced. Hence conditions are ripe for a rebound.”
Apart from oil prices, even oil stocks are set to surge higher on Wednesday leading to new weekly highs. Timing the market is important right now as the surge might not last after the retaliation.