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18 Oct, 2023 11:42

Oil price spikes as Middle East tensions rise

The escalation of the Israeli-Palestinian conflict has sparked fears over potential oil supply disruptions in the region
Oil price spikes as Middle East tensions rise

Global oil prices saw a sharp increase on Wednesday amid fears that the conflict between Israel and the armed Palestinian group Hamas could spread to other countries in the Middle East, causing  global oil supply disruptions.

Markets across the world factored in risk premiums after an apparent missile strike on a hospital in Gaza City killed hundreds of civilians, including doctors, patients and people taking shelter. Both sides have blamed each other for the incident.

Brent crude futures advanced nearly 3%, to $92.50 per barrel, while US West Texas Intermediate crude (WTI) futures surged over 3% to $89.27 a barrel. Both benchmarks gained more than $2 per barrel to touch their highest levels in two weeks during the session.

Apart from geopolitical tensions, oil prices were pushed higher by other factors, including US crude stocks that dropped by nearly 4.4 million barrels in the week ended October 13, much steeper than the 300,000 barrel drop that analysts had projected.

Moreover, faster-than- expected growth of the Chinese economy in the third quarter, along with the latest waves of policy measures are expected to bolster a potential recovery, inevitably generating demand from the world’s second-largest economy.

Chinese oil refinery throughput in September hit a record daily rate, up 12% versus a year earlier, as refiners raised run rates to meet strong demand for transport fuel over the Golden Week holiday and recovering manufacturing activity.

For more stories on economy & finance visit RT's business section

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