Brent gains as market braces for potential escalation of Israel-Iran conflict

The front-month ICE Brent contract has gained $1.26/bbl on the day, to trade at $78.47/bbl at 09.00 GMT.

PHOTO: Oil barrels and a pump jack along with an upward arrow sign indicating price gain. Getty Images

Upward pressure:

Crude oil is poised to end the week on a higher note due to renewed supply disruption fears in the broader Middle Eastern region.

Brent’s price gained after Israeli Defence Minister Yoav Gallant stated that the Israel Defense Forces (IDF) are prepared to launch an unprecedented attack on Iran. This development comes days after Tehran launched over 150 missiles towards Israel, marking a major escalation in the conflict.

“Oil prices continue to be volatile with ICE Brent recovering sharply… amid Middle East tensions,” two analysts from ING Bank said.

Oil market analysts and traders remain on the edge, heading into the weekend amid uncertainty over whether Israel will target Iran’s oil facilities.

“The [oil] market awaits any potential Israeli retaliation against Iran for missile attacks,” ING Bank’s analysts added.

Downward pressure:

The unexpected rise in US crude inventories has put some downward pressure on Brent’s price today.

Commercial crude oil inventories in the US increased by 5.81 million bbls to touch 423 million bbls on 4 October, according to data from the US Energy Information Administration (EIA).

The US inventory report earlier this week was “bearish,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

An increase in US crude stocks indicates lacklustre oil demand growth, which can put downward pressure on Brent’s price.

By Aparupa Mazumder

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