Brent moves higher as Israel ramps up shelling on Gaza

The front-month ICE Brent contract moved $0.92/bbl higher on the day, to trade at $79.12/bbl at 09.00 GMT.

PHOTO: Flags of Iran and Israel. Getty Images

Upward pressure:

Brent’s price continued to move towards $80/bbl mark, after crude oil supply risks escalated in the wider Middle Eastern region.

The Israel Defense Forces (IDF) ramped up drone strikes across the conflict-stricken Gaza Strip yesterday, killing at least 40 people including medical professionals, Reuters reports. This news has put upward pressure on Brent.

“Israel remains on edge as it prepares for a retaliatory attack from Iran following the assassination of Hamas and Hezbollah leaders,” ANZ Bank’s senior commodity strategist Daniel Hynes wrote.

Libya's National Oil Corporation (NOC) declared force majeure in its El Sharara oil field this week, fueling further supply concerns, analysts said. The oil field has a crude oil production capacity of about 300,000 b/d. “There is also no end in sight to the political situation that has closed Libya’s Sharara oil field,” Hynes said.

Downward pressure:

A strong dollar, following better-than-expected US jobs data, built downward pressure on Brent’s price, as it typically makes dollar-denominated commodities like oil more expensive for holders of other currencies.

Besides, "... a call between Iran’s President Masoud Pezeshkian and French counterpart Emmanual Macron potentially opened a diplomatic path to de-escalation [of the nine-month-old Israel-Hamas conflict]", Hynes further remarked.

By Aparupa Mazumder

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