Oil prices rose above $US91 a barrel on Monday as diplomatic efforts to address the crisis in the Middle East intensified, but slipped back later in the day, falling below $US90 on reports that that US was nearing a deal to ease sanctions on Venezuela.
Prices dropped on Monday afternoon (Tuesday AEDT) after the Washington Post reported that the United States and Venezuela had agreed to a deal that would ease restrictions on Venezuela’s oil industry in exchange for a freer presidential election in the country next year.
The fluctuating price of crude oil around the world could have major ramifications, and even hit the price of consumer petrol in Australia.
Brent crude futures, the international oil benchmark, rose as high as $US91 a barrel in Asian hours on Monday, up slightly from Friday’s settlement price of $US90.89. Prices last traded at $US89.65 a barrel.
West Texas Intermediate, the US benchmark, briefly rose to $US87.98, compared with Friday’s closing price of $US87.68.
It last traded at $US86.50.
Still, investors are concerned the Israel-Hamas war could spark a wider conflict in the oil-rich region and further tighten global oil supply.
Both futures had surged Friday, after Israel’s military warned more than 1 million people to leave northern Gaza, triggering worries about a potential ground offensive by Israel in retaliation for terror attacks by Hamas that killed at least 1400 people.
Speaking to CBS Sunday, US National Security Adviser Jake Sullivan said even though there was no new intelligence that the threat level from Iran had changed, “there is a risk of an escalation of this conflict”.
Analysts at ANZ Research expect oil prices to hit $US100 a barrel in the short term because of the growing risk of regional escalation
(9 NEWS)
