Gas Prices Skyrocket

( – Hitting a benchmark in the middle of several current crises impacting the globe, oil prices have remained strong and steady and caused countries to reassess geopolitical risks.

Oil has stood above $90 a barrel amid growing concerns over alarming tensions in the Middle East.

The thought of an expanded conflict prompted Israel to gear up for possible revenge from Iran after an attack on an Iranian diplomatic site in Syria.

Despite this, crude prices did not change much due to positive U.S. job data that boosted the dollar’s strength.

“The market now knows that some kind of retaliation from Iran will likely come — but it doesn’t know when and where and what — and that creates a great discomfort and nervousness,” said leading commodities analyst Bjarne Schieldrop.

Global benchmark Brent and U.S. benchmark West Texas Intermediate both saw slight increases of less than 1%.

This escalation of tensions both affected market prices and shaken the oil options market, which highlights increased instability and a shift in trading patterns where bullish calls are now surpassing bearish puts in value.

These market movements are a complex mix that stemmed from supply constraints and strong demand that shot oil prices up throughout the year.

The Israel-Hamas war and the Houthi actions against maritime trade routes in the Red Sea have raised transportation costs without leading to a broader regional conflict.

However, a lack of progress in ceasefire negotiations between Israel and Hamas over hostage releases in Gaza continues to cause trouble.

In response to market conditions, OPEC+ decided to keep its production cuts by withholding approximately 2 million barrels per day from the global market for the first half of the year.

These decisions follow Mexico’s recent move to limit certain oil exports, which would tighten supply further. Despite concerns, Mexico’s president downplayed the potential impact.

On the domestic front, U.S. gas prices have skyrocketed under Joe Biden, with the national average for regular gasoline hitting a new high by surpassing $3.54 a gallon.

Other factors adding to the rising fuel costs include ongoing geopolitical tensions and policy decisions that impact American energy independence.

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