Oil Surges Over 6%, Brent Surpasses $100 per Barrel
Oil prices surged more than 6% in trading on Thursday (July 23rd), with Brent surpassing US$100 per barrel for the first time since May. The increase occurred after the Houthi group in Yemen claimed responsibility for attacks on two Saudi Arabian oil tankers in the Red Sea.
The attacks drew criticism from US President Donald Trump and heightened concerns about disruptions to global oil supplies. The market began to worry about the risk of escalating conflict in key energy shipping routes.
At 2:20 p.m. New York time, Brent crude for September delivery rose 7.4% to US$101.08 per barrel. Meanwhile, US WTI crude jumped 6.8% to US$92.75 per barrel.
The rise in oil prices was also triggered by worsening relations between Washington and Tehran after the initial agreement between the two countries failed to materialize. This situation has resurfaced concerns that inflation could remain higher.
Inflationary pressures are evident in rising US government bond yields. The 10-year Treasury yield rose 4.4 basis points to 4.704% as investors dumped government bonds.
Macquarie's global energy strategist, Vikas Dwivedi, believes oil prices still have the potential to find support in the coming weeks. This is due to reduced oil supply from the Arabian Gulf region.
Macquarie believes the oil rally is also driven by the return of geopolitical risk premiums and a short squeeze. Although the possibility of further escalation remains open, the likelihood of the conflict escalating into a full-scale war is considered low as long as there are no serious miscalculations by the relevant parties.
Source: Newsmaker.id
