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Oil Rises to October High as Israel Prepares for Iranian Attack

Oil Rises to October High as Israel Prepares for Iranian Attack
Two Argor-Heraeus SA 250 gram gold bars at Solar Capital Gold Zrt. arranged in Budapest, Hungary, on Tuesday, March 22, 2022. Gold edged higher in Asian trading -- following its biggest weekly drop since June -- as investors weighed monetary policy tightening in the U.S. against the impact of the Russia-Ukraine war. Photographer: Akos Stiller/Bloomberg

Oil jumped to the highest price since October as Israel braced for a possible attack from Iran, a development that would threaten major disruptions in a region that accounts for a third of the world’s crude output.

An assault is expected to come as soon as the next 48 hours, which would mark a significant widening of the conflict that started when Hamas attacked Israel in October. Global benchmark Brent surged as much as 2.7% to top $92 a barrel, a level last reached during the early days of the war. US benchmark West Texas Intermediate climbed as much as 3.1% to surpass $87.

Israel is expecting a drone or missile attack on government targets within days, either directly or from Iran’s proxies, people familiar with Western intelligence assessments said. The move still hasn’t been approved by Tehran’s highest-ranking officials, the people said, while the US has moved additional military assets into the region.

Read More: Israel Bracing for Potential Direct Attack From Iran in Days

Brent Crude Jumps Above $92 a Barrel | Oil rallies to October highs amid escalating Middle East risks

“Direct Iranian engagement puts higher odds of a potential supply disruption in the region, causing many traders to continue to reach for exposure in crude and upside crude call options,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth. “Heading into a weekend with significant headline risk, there are few sellers willing to step in and sell the rally.”

Oil has surged about 19% this year as the Middle East conflict bolsters a market shaped by supply restrictions and stronger-than-expected demand.

The escalating geopolitical tensions — also including attacks on Russian energy infrastructure by Ukraine — have spurred bullish activity in the oil options market. There has been elevated buying of call options — which profit when prices rise — in recent days, with implied volatility jumping to a two-month high. The options on Brent are still trading at a premium over bearish puts.

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  • David Forbes says:

    Bloomberg appears to mistakenly believe that the current conflict was “started” on Oct 7, 2023. That Hamas assault on Israel was most likely a last attempt to force the world to confront the Palestinian issue head-on and resolve it. For decades Zionist propaganda, with US support has evaded all attempts to create a lasting peaceful solution to the need for a Palestinian homeland without the interference of an Israeli Occupying Force. And even though the USA should not be threatened (Iran said so) they are preparing for the long-awaited war against Iran, which poses a threat to the paranoid American and Israeli hawks. It really is time to acknowledge the failure of the American Empire to impose its hegemony globally, and to realise that a new world is being born, a multipolar world, and one in which the Global South will play a major part.

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