Oil and gold prices can fluctuate amid diplomatic efforts to resolve Middle East conflicts and humanitarian issues. FreepikBrent crude oil and gold spot prices fluctuated significantly due to the ongoing conflict and market sentiment changed as a result of diplomatic initiatives. WTI oil price could experience sharp swings this week as the United States and other countries try to slow down the Middle East war to bring humanitarian aid and negotiate the release of Israeli prisoners from a Palestinian prison, despite Jerusalem’s pledge to continue its operations. Expulsion of Hamas from Gaza. Global benchmark Brent crude rose to nearly $94 a barrel last week as spot gold topped $2,000 an ounce on fears of contagion linked to the Middle East’s worst fighting in decades. Both fell in Asian trade on Monday, as diplomatic efforts to contain the conflict between Israel and the Palestinian Islamist group Hamas intensified over the weekend, even as shelling in Gaza continued. Many on Wall Street seem to think that crude prices should be higher due to the relatively close proximity of the  Gaza conflict to some of the largest oil producers, including Saudi Arabia, the United Arab Emirates, Iraq and Kuwait. Although Israel and Palestine themselves hardly participate in the global oil trade, the Strait of Hormuz, which surrounds them, is an important center for the movement of oil, with a fifth of all oil passing through its waters. Added to the worry is Israel’s almost daily saber-rattling against Iran, an avowed supporter of Hamas and the fifth largest oil producer – and concerns about retaliation against Tehran by the Israelis and their main ally, the United States. that something unpleasant will happen soon. There is no demonstrable threat to the oil business from this war, yet. However, some oil traders see the conflict for what it is – a major political event, no doubt, but not one that has so far posed an obvious threat to the crude oil trade.  The bottom line is that oil is a commodity that derives value from demand-related consumption. Unlike gold or the dollar, it is not a haven to profit from the mere imagination that supplies are at risk and therefore prices must continue to rise – when the opposite is true. That explains the turn of violent protests on Friday after it was announced that two Hamas prisoners had been released for “humanitarian reasons”. While the notion of a regional – even global – spread of conflict is valid, it is also quite reasonable at this point to maintain – and delay – a risk premium of around $7-10 per barrel since the start of the war. every headline about the escalating fighting has no relative impact on the oil business. Fuel pump prices in the US right now are perhaps the best indicator of how the wider oil business should deal with this crisis. The price of gasoline motorists in the United States actually pay has decreased, to $3.554 a gallon on Thursday from $3.867 a month ago and $3.820 a year ago. This all after crashing to a record high of over $5 a gallon in June 2022. More By This Author:Euro To CAD Forecast 2023, 2024
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