U.S. crude oil benchmark prices settled at their lowest level in two weeks as geopolitical risks continue to move the the price of the fossil fuel.
Future prices for Brent and WTI settled lower on Thursday—the lowest level in two weeks, falling by more than 2% on the day as Israel agreed to delay an anticipated ground invasion of Gaza until at least later this week.
WTI crude was trading at $83.31 on Thursday after sinking $2.08 per barrel (-2.44%) on the day. Brent crude oil fell $2.10 per barrel (-2.33%) to $88.03 at 4:00 pm ET. The WTI benchmark is now $7 per barrel lower than this time last week, with Brent trading down by more than $5 per barrel over the last seven days.
While the conflict in the Middle East between Israel and Hamas has little direct impact on crude oil prices, the threat of Iran’s future involvement in the conflict—and the likely resulting sanctions on Iran should it choose to more actively participate in supporting Hamas—raised crude oil prices until about this time last week.
The conflict has led to a rash of forecast revisions for oil prices, with the usual outlying estimates making a case that oil prices could head to triple digits. Those predictions and the Biden Administration’s fear that a crude price hike could create discomfort for American consumers have sparked another round of discussions that the Administration could release more crude oil from an already pillaged Strategic Petroleum Reserve, and another round of scrambling with Saudi Arabia to encourage OPEC and OPEC+ to increase production.
OPEC, however, is still operating under the idea that extra crude oil production should only be released into the market if fundamentals call for it. As for the Strategic Petroleum Reserves in the United States, they are now just half of what they were when Biden took office.
But already falling oil prices mean the Biden Administration may leave the Biden Administration with little to address.
News: Oilprice.com