As of early this morning April 16 (Vietnam time), US WTI crude oil price was trading at 86.01 USD/barrel – up 0.7%, while the benchmark Brent price stopped at 90.66 USD/barrel – up 0.62%. Bloomberg data even shows that traders rushed into the crude oil options market after Iran’s attack on Israel, trading a record number of call options on oil prices. Brent futures, reaching 100 USD/barrel. Experts say that as tensions in the Middle East escalate, traders have turned to the options market, betting on high oil prices as a hedge against possible spikes in oil prices.
“The market will continue to have fluctuations, especially waiting for Israel’s next response. It can go down but it can also go up depending on the sensitivity of the market. Recently, geopolitical issues will have an unstable impact on the market in general and the energy market in particular. But I think that geopolitics is an aspect, the biggest driver of oil price increases at this time lies in supply and demand,” said Ms. Amrita Sen, Chief Energy Expert of Energy Aspects. .
The oil and gold markets are “holding their breath” waiting for the next actions by Israel and the West against Iran (Illustration: KT)
In a monthly report released last week, the International Energy Agency (IEA) revised down its 2024 oil demand growth forecast by about 130,000 barrels/day to 1.2 million barrels/day, citing the reason: lower heating fuel use and a sustained decline in manufacturing in developed economies. The IAE is expected to extend the rate of reduction further to 1.1 million bpd next year “once the post-Covid-19 recovery has concluded.”
Reuter news agency quoted sources as saying that Russian oil refineries have reduced capacity by 10% after Ukrainian drone attacks. In addition, after Iran’s drone attack on Israel over the weekend, the US House of Representatives voted on several bills to strengthen sanctions against Iran, including a bill to reduce imports. crude oil exports from Iran to China.
In addition to oil prices, the world gold market also has many fluctuations following increasing tensions between Israel and Iran. The price of gold for immediate delivery yesterday in the US increased by 39.3 USD to 2,383.5 USD/ounce. In the Asian session this morning, gold prices continued to increase slightly by 1.2 USD to 2,384.7 USD/ounce. Gold futures price for delivery in June 2024 on Comex New York increased by 8.9 USD, equivalent to an increase of 0.37% to 2,383 USD/ounce. Experts say that rising tensions in the Middle East are creating a safe haven for gold, but that is not a sustainable trend. The world market is waiting for changes in the monetary policies of major countries, including the US, as well as China’s physical gold bullion demand from now until the end of this year.
However, both the oil and gold markets could be further negatively impacted if Israel takes retaliatory measures against Iran and the West increases sanctions on this Muslim country.
Oil and gas experts in the Middle East said that the Middle East market opened relatively quietly after Iran’s attack. However, any attack on oil production or export facilities in Iran would push Brent crude prices to $100 per barrel. And the closure of the Strait of Hormuz (located between Iran and Oman, where 1/5 of global oil production passes daily) will cause oil prices to fluctuate between 120 USD and 130 USD/barrel.