(StraightShooterNews.com) – In the middle of several crises impacting them, Americans are about to feel more pain at the pump as oil prices surged more than 3% on Monday.
This marks a consistent rise over five sessions due to fears that escalating conflicts in the Middle East might tighten global crude oil availability.
Brent crude futures closed at $82.30 a barrel, up by $2.64 or 3.3%. Meanwhile, U.S. West Texas Intermediate crude ended the day at $80.06 a barrel, climbing $3.22 or 4.2%.
This weekend, the U.S. announced it would deploy a guided missile submarine to the Middle East, anticipating potential attacks on Israel by Iran and its allies.
“We’re piling assets one on top of the other and giving the impression that, if this turns hot, it could also turn ugly,” noted New York-based Mizuho director of energy futures Bob Yawger.
Tensions escalated following the announced intentions of Iran and Hezbollah to retaliate for the killings of Hamas leader Ismail Haniyeh and Hezbollah military commander Fuad Shukr.
This could escalate the conflict and limit global crude supplies, potentially spiking prices.
Yawger suggested that the U.S. might embargo Iranian crude exports, impacting about 1.5 million barrels per day.
“The market is increasingly concerned about a region-wide conflict there,” remarked New York-based Again Capital partner John Kilduff.
He speculated that a broader conflict might force Israel to target Iranian oil facilities and disrupt output from other key producers like Iraq.
Last week, Brent and WTI prices were maintained by strong U.S. employment data, which lessened fears of a U.S. economic downturn and fueled speculation about a potential interest rate cut.
“Support is coming from last week’s better-than-expected U.S. data, which eased fears of a U.S. recession,” said IG markets analyst Tony Sycamore.
Comments from U.S. central bankers last week indicated that inflation might be cooling enough to allow for an interest rate cut as early as next month. This typically boosts economic activity and increases oil demand.
Investors are now focusing on the upcoming U.S. consumer price index data for July, which is expected to show a slight increase in inflation.
Meanwhile, oil prices were also supported by faster-than-expected inflation rates in China, the world’s largest oil importer.
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