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Crude oil futures rose on Friday and extended their weekly winning streak to four, marred by a surge in Middle East tensions that sparked fears of a wider war, as well as a poorly supplied global market and signs of strong recovery. request.
Any Iranian attack carried out on Israeli soil would mark a “definitive escalation” of the proxy war between the two countries, concerns that have sent the market into “risk-averse mode, causing stocks to sell off.” [and] oil rallied as people braced for what could be a sharp rise in prices if this confrontation were to occur,” said Phil Flynn of Price Futures Group.
Tensions in the Middle East resulting from the war between Israel and Hamas have had little impact on oil supplies, allowing prices to see a sustainable rise rather than a spike, but Iran’s direct involvement could trigger a rapid rise soon oil prices term at 95-100 dollars. /bbl, said Ipek Ozkardeskaya of Swissquote Bank Marketwatch.
Nymex front-month crude (CL1:COM) for May delivery rose 0.3% Friday and Friday +4.5% for the week at $86.91 a barrel, and June 1 Brent crude (CO1:COM) gained 0.5% on Friday and +4.8% this week at $91.17 a barrel, both at their highest levels since Oct. 20.
ETFs: (NYSEARCA:USE), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI)
The geopolitical risk premium remains elevated, but Rebecca Babin, senior energy trader at CIBC Private Wealth, sees downside risks to the continuation of oil’s rally.
“When we get Brent above $90 and a reasonably strong dollar, emerging market crude importers start to really feel the pinch and you see the demand destruction,” he said.
Spare capacity in Saudi Arabia and the United Arab Emirates, the potential resolution of OPEC+ cuts, and the possible reduction of interest rates by the Fed also represent possible headwinds; These three components could lead to longs making some profits, Babin added.
Capital Economics expects oil prices to decline in the second half of this year and beyond, with OPEC+ likely to begin easing production cuts due to fears of losing market share, which would “more than cover the modest strengthening demand we expect as advanced economies begin to ease monetary policy.” “
Analysts attribute oil’s year-to-date rally to conflict in the Middle East and Ukraine’s attacks on Russian energy infrastructure, along with OPEC+ cuts, and predict that Brent crude “will have slipped to $60 a barrel by the end of 2026, from $89 at the time of this writing.”
The energy sector, as indicated by the Energy Select Sector SPDR ETF (NYSEARCA:XLE), achieved arguably the best performance of the week among the industrial groups of the S&P 500 index 11, +3.9%.
Exxon Mobil (XOM) posted an all-time closing high of $121.37, based on data going back to 1972, according to Dow Jones.
Top 20 Gains in Energy and Natural Resources in the Last 5 Days: Drilling Tools International (DTI) +56%Indonesian Energy (INDO) +40.3%Brenmiller Energy (BNRG) +38%First Majestic Silver (AG) +32.5%Mexico Energy (MXC) +31.9%Grindrod Expedition (GRIN) +31.8%Coeur Mining (CDE) +29.2%Lithium Prime (FMST) +27.1%Fortuna Silver Mines (FSM) +26.2%BP Prudhoe Bay Royalty Trust (BPT) +25.9%Southern Gas Transporter (TGS) +22.8%Natural Gas Services (NGS) +21.5%US Gold Mining (USGO) +21.4%Northern European Oil Royalty Fund (NRT) +17.8%Imperial Petroleum (IMPP) +17.5%Endeavor Silver (EXK) +17.4%Osisko Development (ODV) +17.3%Marine oil (MARPS) +17%Dakota Gold (DC) +16.4%Pan American Silver (PAAS) +16.2%.
Source: Barchart.com