Oil Prices Are Rising Rapidly: Key Factors
22 July 14:37
The rise in oil prices accelerated amid fears of an escalating conflict in the Middle East. This was reported by "Komersant Ukrainian", citing “Interfax-Ukraine.”
The price of September Brent crude futures on the London-based ICE Futures exchange rose by $3.02 (3.32%) to $94.03 per barrel.
WTI crude oil futures for September delivery on the New York Mercantile Exchange (NYMEX) electronic trading platform rose by $3.12 (3.7%) to $87.46 per barrel.
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Both benchmarks have risen 2% and are now trading at a six-week high.
Investors are concerned about the ongoing exchange of blows between the U.S. and Iran, as well as threats by Yemeni Houthis to attack tankers carrying Saudi oil in the Bab el-Mandeb Strait.
This strait is a key point on one of the two main routes through which Saudi Arabia exports oil to Asia; the other runs through the Strait of Hormuz.
In response to the threats, three tankers carrying Saudi oil that were headed for India and China turned back in the Red Sea on Tuesday and headed for the Suez Canal, rather than attempting to pass near the coast of Yemen, the publication reports.
“Given the supply disruptions from the Persian Gulf, the risks to Saudi exports in the Red Sea, and developments in the Black Sea, it is reasonable to assume that Brent crude is currently undervalued,” ING analysts wrote.
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