Oil Surges Nearly 6% After Israel Begins Ground Raids Into Gaza

(MENAFN- The Al-Attiyah Foundation) Oil prices leapt nearly 6% on Friday, with brent posting its highest weekly gain since February, as investors priced in the possibility that the conflict in the Middle East could widen as Israel began ground raids inside the Gaza Strip. Israel's announcement marked a shift from an air war to ground operations against Hamas a week after the militant Palestinian group's deadly rampage on settlements north of the Gaza Strip. Brent futures settled up $4.89, or 5.7%, at $90.89 per barrel. U.S. West Texas Intermediate crude gained $4.78, or 5.8%, to $87.69 a barrel. Brent also recorded a weekly gain of 7.5%, its biggest such increase since February. WTI climbed 5.9% for the week. The conflict in the Middle East has had little impact on global oil and gas supplies. Investors and market observers, however, are assessing how it could escalate and what it might mean for supplies from nearby countries in the world's top oil producing region. Also boosting prices, was the U.S. move on Thursday to impose the first sanctions on owners of tankers carrying Russian oil priced above the Group of Seven's price cap of $60 a barrel, an effort to close loopholes in the mechanism designed to punish Moscow for its invasion of Ukraine.

Asia Spot LNG Rise as Geopolitical Tensions Fuel Supply Woes

Asian spot LNG prices climbed $1 this week despite muted demand, tracking European gas prices, on concerns over tensions in the Middle East and damage to the Baltic connector gas pipeline linking Estonia and Finland. The average LNG price for November delivery into north-east Asia rose 7.4% to $14.5 per mmBtu. Markets are having a strong response based on sentiment, while structurally both basins are well supplied somewhat as we move into a milder winter season. In Europe, Dutch and British gas prices rose on Friday morning as forecasts for cooler temperatures lifted demand while geopolitical risks and strikes at LNG facilities in Australia raised supply concerns. Negotiations over a pay and conditions deal between Chevron and unions at its LNG facilities in Australia made progress again on Friday but fell short of sealing a deal to end months of labour disputes. In the United States, gas futures fell about 3% on Friday on rising output, a drop in exports to Mexico and forecasts for mild weather through late October.

By: The Al-Attiyah Foundation.

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