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What risks threaten oil markets in light of the Israeli war on the Gaza Strip?



What risks threaten oil markets in light of the Israeli war on the Gaza Strip?

The price of black gold rose relatively slightly as a result of the Israeli war following the bloody attack by Hamas on Israel on October 7.


Experts say the escalation of Israel’s war in the Gaza Strip could put further pressure on global oil and gas supplies disrupted by Russia’s aggression in Ukraine.

Currently, the price of black gold has risen relatively slightly as a result of the Israeli war following the bloody attack by Hamas on Israel on October 7. European benchmark Brent rose about 10 percent, while its U.S. counterpart rose about 9 percent. Prices are around $90 per barrel, which is still far from their historic levels.

“Israel is not an oil producer, and there is no major international oil infrastructure near the Gaza Strip,” says Eduardo Campanella, an analyst at UniCredit Bank.

Still, investors are in a state of anticipation, “aware of the risks inherent in the Middle East to global supplies,” confirms Stephen Innes, analyst at SBIM.

Smuggling Iranian oil to markets?

One of the main risks to the energy market is the direct intervention of Iran, which supports Hamas and is a staunch enemy of Israel.

Iran, a member of the Organization of the Petroleum Exporting Countries (OPEC), has had its production and exports affected by international sanctions for years. But as its production has increased over the past 12 months, it is suspected that oil is being smuggled into the market.

Helge Andre Martinsen, an analyst at DNB, told Agence France-Presse that the flow of black gold has proved decisive in controlling prices against a backdrop of high demand and supply shortages, which he considers “administrative”. (US President Joe) Biden turns blind.” “.

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For his part, Eduardo Campanella points out that even if Tehran stays out of the conflict, “the West may decide to tighten economic sanctions on it or implement existing sanctions more effectively.”

Tehran could respond by closing the Strait of Hormuz, the world’s most important oil transit area, where the daily flow of oil carries more than 17 million barrels, according to SIP research, or 30 percent of all oil. the sea

Campanella said only Saudi Arabia and the United Arab Emirates have pipelines to send crude oil from the Gulf without going through the Strait of Hormuz.

What is the worst case scenario?

Campanella noted that the worst-case scenario, considered unlikely but unlikely by analysts, is that if sanctions are tightened, Iran will retaliate by attacking the oil facilities of Saudi Arabia, one of the world’s major producers and exporters.

In September, attacks targeting Saudi Arabia’s oil infrastructure were enough to temporarily halve the country’s output and send Brent crude prices up nearly 20 percent in a single day. Yemen’s Houthi rebels, backed by Tehran, claimed responsibility for the attacks.

Experts point to previous oil shocks, the first fifty years ago in the wake of OPEC’s embargo on Israel’s allies in the midst of the Yom Kippur War, and then the second shock in 1979 in the wake of the Iranian revolution. Crude oil prices soared within months, weakening advanced economies.

Impact on LNG supplies

In the case of gas, the effects appear much faster. In mid-October, gas prices on the Dutch Gas Futures Trading Platform (TTF), the European benchmark for natural gas, rose by a third of what they were before the October 7 attack.

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According to Stephen Innes, the war “seriously threatens the regional natural gas market and could impact LNG supplies.”

In turn, says Giovanni Stanovo of UPS, “Although European stocks are almost full, they are not enough to get through the winter if all imports stop.”

Meanwhile, the American company Chevron has suspended its operations at the Tamar site on the Israeli coast on instructions from the country’s authorities.

According to Innes, the field represents “about 1.5 percent of the world’s liquefied natural gas supply” and supplies mainly the domestic market, followed by Egypt and Jordan.


The consequences of closing Israel’s largest gas field, the Leviathan field, would be more worrisome, according to analysts who pointed to a price spike of 345 euros per megawatt-hour at the start of the war in Ukraine. A record high.

Additional resources • AFP

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EUR/USD Analysis Today: Euro Looking for Buyers



EUR/USD Analysis Today: Euro Looking for Buyers

The Euro went back and forth during Thursday’s session, focusing on the 200-day EMA, an indicator that people sometimes focus on. At the same time, the market found itself testing the 1.0750 level, which had previously led to significant price volatility. Taking all factors into account, this situation highlights the situation where the Euro is preparing for a consolidation mode, which is waiting for an improvement in the US bond markets. Interest rates have played an important role in currency markets in recent times as traders discern the Federal Reserve’s stance on monetary policy – ​​whether it will ease or maintain a more conservative approach.

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Also, the recent decline in interest rates may indicate market expectations of an impending economic downturn, which tends to promote the safe-haven status of the US dollar. This dynamic manifests itself in increased demand for US bonds, which subsequently leads to lower yields and higher demand for the US dollar.

Further complicating the situation is the influx of capital into Europe, which is struggling with the problems of the Great Recession. Overall, prevailing landscape traders face short-term rallies, although support should remain in the intervention area. It’s worth noting that next Friday’s session will be important, as employment data could influence the central bank’s course of action, or at least the perception of what it may or may not do. The market will continue to ask a lot of questions about the EU, which will favor the US dollar. Additionally, if the world slips into a major recession, the US dollar is usually a safe haven for traders.

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Ultimately, the Euro is going through a challenging environment right now and the 1.0850 level is one to watch as it struggles with various factors. A break of this level could indicate an upward trend, although the current momentum is insufficient to facilitate such a move. It’s conceivable that a significantly weaker employment report could give the markets the momentum they need to return to volatility and make this market move very quickly. However, as we approach the end of the year, this could mean a decrease in volume, making markets difficult to predict.

Daily chart of EUR/USD

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Oil falls to lowest level in last 6 months



Oil falls to lowest level in last 6 months

Oil prices fell to a six-month low on Thursday, driven by investor concerns about slowing energy demand in the United States and China at a time when U.S. production is near record highs.

Brent crude futures were down 25 cents at $74.05 a barrel, while US West Texas Intermediate crude futures were down four cents at $69.34, with both crudes hitting their lowest levels since late June.

John Evans, an analyst at PVM Oil, said: “Demand from the biggest global oil importer (China) is under pressure on prices, especially with the continuation of record production by the largest producer, the US.”

U.S. production is at an all-time high of more than 13 million barrels per day, according to U.S. Energy Information Administration data.

The Energy Information Administration said U.S. gasoline inventories rose 5.4 million barrels last week to 223.6 million barrels, more than five times the expected increase of one million barrels.

Concerns about the Chinese economy also limited oil price gains.

Chinese customs data showed crude oil imports fell 9 percent in November from a year ago due to higher inventory levels, weaker economic indicators and lower demand from independent refineries.

Although China’s total imports fell month-on-month, exports grew in November for the first time in six months, suggesting rising global trade flows could help the manufacturing sector.

Oil prices have fallen about ten percent since the Organization of the Petroleum Exporting Countries (OPEC) and the OPEC Plus group – which includes allies including Russia – announced a voluntary production cut of 2.2 million barrels per day in the first quarter of next year.

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On Thursday, the biggest oil exporters, Saudi Arabia and Russia, called on all OPEC Plus members to join a deal to cut production for the benefit of the global economy.


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Gold rises as dollar weakens and U.S. jobs data expected by Reuters



Gold rises as dollar weakens and U.S. jobs data expected by Reuters
© Reuters. Gold nuggets in a photo from the Reuters archive.

By Harshit Verma

(Reuters) – As the dollar fell on Thursday, investors could look to U.S. jobs data released later this week for fresh clues on the Federal Reserve’s path on interest rates.

It was up 0.3 percent at $2,030.20 an ounce by 0748 GMT. US gold futures were at $2,047.10 an ounce.

It fell 0.3 percent against rival currencies, with gold prices lower for holders of other currencies, while the 10-year yield hit a three-month low.

U.S. data released this week showed signs of a gradual slowdown in the U.S. labor market, with job openings falling to their lowest level in two-and-a-half years in October, while private sector employment rose less than expected last month.

Investors await U.S. nonfarm payrolls data to be released on Friday before the Federal Reserve updates its economic forecasts and interest rates at its fiscal policy meeting scheduled for Dec. 12-13.

“There is a widespread expectation that non-farm payrolls will be lower,” said Nicholas Vrabel, head of global corporate markets at ABC Refinery.

According to CME Group’s FeedWatch service, 60 percent of traders expect interest rates to fall by March 2024. Low interest rates support gold, which does not generate income.

For other precious metals, it was $23.87 per ounce. Platinum rose 0.5 percent to $894.03. An ounce was up 0.7 percent at $950.42.

(Prepared by Noha Zakaria for Arabian Bulletin – Editing by Salma Najm)

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