Oil Skyrockets Over 4% Due to Israel/Hamas Conflict

Meanwhile, OPEC warns that trillions of dollars are required to meet long-term demand.

Following the steepest weekly loss incurred since March due to fears of inflation causing demand destruction, oil prices skyrocketed on Monday as traders worried that the clash between Israel and Hamas could spread.

Skittish traders caused Brent to settle up $3.57, or 4.2 percent, at $88.15 per barrel, while West Texas Intermediate settled up $3.59, or 4.3 percent, at $86.38 per barrel.

Tina Fordham, geopolitical strategist and founder of Fordham Global Foresight, said, "Wars are inflationary and wars in the Middle East especially are inflationary."

The Israeli military said on Monday it had called up 300,000 reservists and was imposing a total blockade of the Gaza Strip in retaliation for the weekend Hamas attacks, a strategy suggesting that a ground assault may be imminent.

All but eclipsed on Monday was the Organization of the Petroleum Exporting Countries (OPEC) raising its medium- and long-term forecasts for global oil demand; the cartel stated that it expects 
global demand to reach 116 million barrels per day (bpd) by 2045, up from 99.6 million bpd in 2022 and driven by India, China, and other Asian countries.

Moreover, OPEC calculated that oil sector investments of $14 trillion, or around $610 billion on average per year, would be required to meet the demand.

OPEC secretary general Haitham al-Ghais said, "Calls to stop investments in new oil projects are misguided and could lead to energy and economic chaos.

"History is replete with numerous examples of turmoil that should serve as a warning for what occurs when policymakers fail to acknowledge energy's interwoven complexities."

Also on Monday, GasBuddy reported that gasoline prices have declined in virtually all 50 U.S. states, on average to $3.7 compared to $3.8 a week ago, and predicted that the trend will continue.

Patrick De Haan, head of petroleum analysis at GasBuddy, said, "At long last, the decline in gas prices that we've been waiting to see has arrived, and the locomotive of falling prices has only recently started on a downhill, gaining momentum; however, some new caution signs have emerged with the recent attacks on Israel, potentially destabilizing a sensitive region.

"Even with oil prices rising as a reaction to the attacks, I remain optimistic the national average could decline another 25-45 cents by late November, with prices potentially falling nearly triple that in California."