2023-10-31 16:21:28
The observation is undoubtedly a little surprising in the current context, and yet, it is the reality: at the end of October, oil prices are similar to what they were on Friday October 6, a few hours so before Hamas launched a series of deadly attacks in southern Israel.
A few hours before a bloody war in the Middle East… Three weeks ago, a barrel of WTI – the American benchmark – was trading at just under $83; today, the same barrel is worth… a little less than 83 dollars. In the meantime, the war in this region of the world has obviously caused the price of oil to rise to around $90, an additional cost that professionals readily describe as a “war bounty.”
But, writes Ole Hansen, head of commodities at Saxo Bank, this crude oil “war bounty”was erased with the sudden fall in oil prices on Monday [30 octobre, NDLR], due to growing hopes that the conflict between Israel and Hamas will remain contained and will not spread to Iran, the biggest worry of the markets throughout this conflict. The short-term demand outlook, which is showing signs of slowing, is also weighing on prices.”
In other words, traders are focusing more on what they call “oil market fundamentals” – supply and demand, the strength of economic growth around the world, etc. – as on geopolitics and its risks. A tricky bet because, if the war between Israel and Hamas were to boil over, spreading to the entire Middle East – and in particular to Iran – then, yes, oil prices might really skyrocket .
In the worst case scenario, a barrel of oil might even be worth up to $157 according to the World Bank! This would also be an absolute record, the current record – a little over $147 per barrel – having been established in 2008.
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