This morning Beijing time, on the social media platform "Telegram", there was news that the Israeli Air Force attacked Iran. According to verification, no mainstream media or reliable sources have confirmed this so far. Influenced by this news, WTI crude oil rose rapidly by 1% at 6:30 this morning, and gold also climbed in the short term, but the gains were wiped out a few minutes later.
Nevertheless, the escalation of tensions in the Middle East is real. According to sources, Israel will soon retaliate against Iran, while Iranian media said that Iran has prepared 10 scenarios to deal with potential Israeli attacks.
Brent crude surged above $80 a barrel on Monday, its highest price since August, as tensions escalated in the Middle East, sparking speculation that Israel could attack Iranian oil infrastructure.
Brent crude rose 3.7% on Monday, while WTI also rose 3.7% to over $77 a barrel, extending last week's gains driven by speculation about how Israel would respond to Iran's missile attack last week. U.S. President Biden said on Friday that he did not know when Israel's response would come, "I would consider other options other than striking the oil fields."
Israel's Channel 13 reported on Monday, citing an unnamed U.S. security official, that Israel will soon respond to Iran's October 1 missile attack. The report did not provide further details. Previously, Israel has vowed to retaliate against Iran, and there has been speculation about whether a potential attack on Iran would target the country's oil fields.
“Anxiety is building,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Group. “The longer we wait, I feel like the fear is building, just like when you’re at the top of a roller coaster and you’re expecting the drop.”
Tensions remain high in the Middle East, with Hamas firing a barrage of rockets at Tel Aviv and Israel re-sending troops to northern Gaza over the weekend, while also conducting air strikes and limited ground operations in Lebanon. Iran’s oil output has been restored to almost full capacity and could be threatened if tensions escalate.
Brent crude posted its biggest weekly gain since January 2023 last week, largely due to escalating tensions in the region, which accounts for about a third of global crude supplies.
The gains marked a clear reversal of sentiment after prices plunged in the third quarter on concerns about the supply and demand outlook for next year. Goldman Sachs Group Inc. analysts including Daan Struyven predicted in a memo that Brent crude could surge to $90 if Iranian oil supplies were disrupted.
Separately, traders pointed to a Goldman Sachs report estimating that algorithm-driven traders known as commodity trading advisors (CTAs) could unleash up to $40 billion in buying power on Brent and WTI if prices rise sharply.
Those funds and other speculators had accumulated record short positions before the latest tensions and quickly unwound those bets over the past week.
Potential supply disruptions from Hurricane Milton in the Gulf of Mexico also kept investors on alert. Chevron Corp evacuated an oil platform and halted production on Monday.
The oil options market continues to favor bullish options. Brent implied volatility gauges near their highest level in nearly a year, while money managers added more net long positions on the global benchmark, suggesting that in just a few days, an originally bearish market consensus is now at risk of further price increases. Large volumes in exchange-traded products suggest that large price moves are also attracting retail investors.
"There's a lack of risk-takers in the market, most traders have had a tough year and are not willing to take on huge volatility risk so close to the end of the year," said Scott Shelton, energy expert at TC ICAP.
The article is forwarded from: Jinshi Data