- November 16th, 2012
Oil Rises as Middle East Tension May Disrupt Supplies
Oil rose on concern that the clash between Israel and Hamas will escalate into a wider conflict that would endanger Middle East crude shipments.
Futures advanced as much as 1.5 percent as Israel extended its bombing of Gaza and militant groups fired rockets at the Jewish state. Egyptian Prime Minister Hisham Qandil visited Gaza today and called for an international effort to end the violence. Israel’s army said it has deployed tanks near the Gaza border and called up reservists.
Crude oil for December delivery, which expires today, rose 60 cents, or 0.7 percent, to $86.05 a barrel at 10:17 a.m. on the New York Mercantile Exchange. The more-actively traded January contract gained 59 cents, or 0.7 percent, to $86.46.
Brent oil for January settlement increased 60 cents, or 0.5 percent, to $108.61 a barrel on the London-based ICE Futures Europe exchange, boosted by disruptions in the North Sea.
“Fighting between Israel and Hamas, together with the disruption in the North Sea production, is good for an extra dollar in the crude price,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “It’s hard to be short when there’s shooting between Israel and the Palestinians in Gaza.”
Air-raid sirens sounded for a second day in Tel Aviv and an explosion was heard in the city. The municipality has opened bomb shelters, Channel 2 TV said. Hamas’s armed wing, the Al- Qassam Brigades, said in an e-mail from Gaza that it fired a rocket at Tel Aviv.
“The bombing has been heightened and it could disrupt oil trade,” said Bill Baruch, a senior market strategist at Iitrader.com in Chicago. “The geopolitical tension will keep the market higher.”
Israel said yesterday it’s ready to step up its operation if rocket fire continues, signaling the possibility of the first ground assault on Gaza since December 2008, when more than 1,100 Palestinians and 12 Israelis dead.