2023-10-15 07:53:31
Oil prices jumped regarding 6% as investors anticipate the impact of the conflict on supplies (AFP)
Experts and economic analysts expect that global markets will witness more ripple effects from the conflict in the region, and are monitoring the situation to see whether the conflict will attract other countries that can raise oil prices, which will push the flow of capital to safe assets.
Israel continues to prepare for a ground invasion of the Gaza Strip, which is run by the Hamas movement, following asking the residents of Gaza City to evacuate and head south. At the same time, Israeli National Security Advisor Tzachi Hanegbi warned the Lebanese Hezbollah once morest igniting a war on a second front.
“It appears we are headed toward a large-scale ground invasion of Gaza and significant loss of life,” said Ben Cahill, senior fellow in the Energy Security and Climate Change Program at the Center for Strategic and International Studies. “Any time a conflict of this magnitude erupts, there will be a market reaction.” .
Over the past week, the impact of concerns related to the conflict appeared in asset prices, which contributed to the decline in stocks on Friday, and the US Standard & Poor’s index fell 0.5%. As for safe haven assets, they witnessed buying waves, as gold rose more than 3% on Friday, and the dollar touched its highest level in a week.
Oil prices jumped regarding 6% on Friday, as investors anticipated the impact of the conflict on supplies from neighboring countries in the largest oil-producing region in the world.
“If it turns out that the conflict is expanding, oil prices will rise even more,” said Michael Englund, chief economist at Action Economics in Colorado.
Bernard Baumol, chief international economist at the Economic Outlook Group in Princeton, New Jersey, suggested that “the expansion of the conflict will also cause inflation to rise, and thus accelerate the pace of interest rate hikes around the world.”
But he pointed out that “the United States may be the exception to this scenario, because foreign investors will pump their capital into what they consider a safe haven during global conflicts.”
He said regarding what might happen in the United States, “Interest rates may fall… and we expect the dollar to rise.”
Other types of fuel may also be affected. For example, in light of developments, Chevron announced the cessation of natural gas exports through a major pipeline that passes under the sea between Israel and Egypt.
“The biggest danger to the oil market is that this conflict attracts neighboring countries,” said Cahill of the Center for Strategic and International Studies.
Analysts ruled out that the rise in oil prices would have a significant impact on gas prices in the United States or consumer spending.
“Consumers are unlikely to feel a significant impact on gas prices anytime soon,” Englund said.
(Archyde.com)
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