Commodities Week Ahead: Oil, Gold to Swing on Twists and Turns of Middle East War
Oil and gold could see sharp price swings this week as the United States and other world powers try to slow the war in the Middle East to bring in humanitarian aid and negotiate the release of Israeli prisoners from Palestinian hold, even as Jerusalem vows to continue its mission of dislodging Hamas from Gaza.
Global crude benchmark Brent climbed to nearly $94 per barrel last week while the spot price of gold breached $2,000 an ounce on contagion fears related to the worst fighting the Middle East has seen in decades.
Both fell in Asian trade on Monday as diplomatic efforts grew over the weekend to contain the conflict between Israel and the Palestinian Islamist group Hamas, although Gaza continued to be bombarded.
Vandana Hari, founder of oil market analysis provider Vanda Insights, said in comments carried by Reuters that there is «some relief in the oil market that Israel is holding off on a planned ground incursion of northern Gaza to negotiate a release of hostages, which opens up a window for diplomacy.”
Added Hari:
»A ground siege is seen as a potential trigger for widening the Israel-Hamas conflict into the Middle East region, the factor behind crude's risk premium over the past fortnight," Hari said.
A senior Israeli official, however, told CNN there will be “no ceasefire” in Gaza amid US and Qatari efforts to free more than 200 hostages held there by Hamas. The official said he was “not aware” of US calls for a delay to Israel's expected Gaza ground operation, although he concurred that both Israel and the US want all the hostages released “as quickly as possible.”
“Humanitarian efforts cannot be allowed to impact the mission to dismantle Hamas,” added the official, whose identity was withheld by CNN.
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