Oil prices spike above $74 a barrel following Iran's threats towards Israel

On November 1, oil prices rose due to renewed market concerns about a potential escalation of tensions in the Middle East, particularly following reports that Iran is preparing a retaliatory strike against Israel from Iraq in the coming days.

Thus, the price of January futures for Brent crude on the ICE Futures exchange in London currently stands at $74.06 per barrel, marking an increase of $1.25 (1.72%) from the previous trading session's close, Caliber.Az reports, citing foreign media.

Meanwhile, December futures for West Texas Intermediate (WTI) crude on the electronic trading platform of the New York Mercantile Exchange (NYMEX) have also risen, gaining $1.33 (1.92%) to reach $70.59 per barrel.

Israeli intelligence has reportedly indicated that Iran may be preparing to launch an attack on Israel from Iraqi territory in the coming days, potentially ahead of the US presidential election on November 5. This information, cited by Axios, is based on insights from two anonymous Israeli sources. The anticipated assault is expected to involve a significant deployment of drones and ballistic missiles.

Meanwhile, oil prices have been buoyed by speculation that OPEC+ might postpone its planned increase in oil production scheduled for December by a month or longer. Four sources familiar with the situation disclosed that this consideration arises from concerns regarding softening oil demand and increasing supply. A decision to delay this production increase could be made as soon as next week, according to two of these sources.

However, despite these supportive factors, oil prices are projected to fall by more than 1% for the week, struggling to recover from a 6% decline observed on October 28, following Israel's military strike against Iranian targets on October 26, which notably avoided energy and nuclear facilities, thus not disrupting energy supplies.

IG market analyst Tony Sycamore, based in Sydney, remarked, "Despite the crude oil market attempting to secure a third consecutive day of gains, it has not been able to fully recover from the significant drop that followed the market reopening on October 28."

He noted that West Texas Intermediate (WTI) prices might rebound towards last closing price of approximately $71.80 on October 25, as geopolitical tensions in the Middle East remain a focal point.

Sycamore added that future price movements would likely depend on the outcome of the US election and the details of any fiscal stimulus that may arise from the upcoming NPC standing committee meeting in China — both major events for the world's largest oil consumers taking place next week.

By Aghakazim Guliyev