• Road to riches

    Taxpayers keep funding structures with big plans but who knows what efficacy, says Mandi Smallhorne.

  • Don't fall for Ponzi scams

    An expert unpacks the tell-tale signs to watch out for.

  • Inside Labour

    A smokescreen of misleading rhetoric won't make SA's problems go away, says Terry Bell.

See More

Oil boils on Tel Aviv explosion

Nov 21 2012 13:03 Reuters

Related Articles

Petrol fuels inflation shocker

Petrol chaos at SA filling stations

No major petrol problems anticipated

No need for panic over petrol

Petrol price hiked again

Petrol, food prices main inflation risks

London - Brent crude oil rose more than $1 a barrel on Wednesday after an explosion on a Tel Aviv bus intensified concerns the clashes between Gaza and Israel could lead to a wider regional conflict that would disrupt oil flows.

An explosion hit a bus in the heart of Tel Aviv on Wednesday, wounding at least 10 people in what officials said was a terrorist attack.

This dented mounting hopes that a ceasefire may be brokered in coming days.

Israeli air strikes shook the Gaza Strip and Palestinian rockets struck across the border as US Secretary of State Hillary Clinton held talks in Jerusalem in the early hours of Wednesday.

Brent crude futures were up $1.07 cents at $110.90 a barrel by 1044 GMT, off an earlier session-high of $111.08. US crude rose 71 cents to $87.46.

If there is any progress on a truce, there could be a fairly sizeable retreat in oil, said Thorbjørn Bak Jensen, an analyst at A/S Global Risk Management in Middelfart, Denmark.

"If there is a ceasefire, prices will come down again. Most of the increase we've had the past week or so has been on speculation of what will happen in the Middle East," he said.

Although little oil is produced in Israel or neighbouring Egypt, fears that major oil producing Arab nations could become involved in the conflict have aroused fears that supplies from the Gulf can be disrupted.

Gains were capped as fears for the demand outlook returned to the fore after euro zone finance ministers ended a meeting in Brussels on Wednesday without agreement on the next tranche of loans to Greece.

Concerns on the US economy also weighed on prices, as Federal Reserve Chairperson Ben Bernanke warned that failure to resolve a budget crisis could lead to recession in the world's biggest oil consumer.

Prices are likely to move fairly rapidly as the course of the Gaza conflict unfolds, said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong.

"We're going to see some crazy volatility in the market with rising geopolitics and rising economic uncertainty. The Middle East tensions could continue to give prices some life in the near term but we suspect that bearish economic factors will be dominant."
Geopolitics, inventories

Adding to geopolitical risks, the United States on Tuesday blocked a UN Security Council statement condemning the escalating conflict between Israel and the Palestinians in the Gaza Strip, setting the scene for a possible showdown between Washington and Russia on the issue.

Investors will watch U.S. inventory data from the Energy Information Administration at 15:30 GMT for more clues on the outlook for supply.

Crude oil and gasoline inventories were forecast to have increased last week while distillate stockpiles were seen down on higher heating oil demand.

US crude oil inventories tumbled last week due to a drop in imports, data from the American Petroleum Institute released on Tuesday showed.

Total US crude stocks fell by more than 1.9 million barrels in the week to Nov. 16, after analysts polled by Reuters had forecast a build of 900 000 barrels.
commodities  |  oil  |  explosion



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Add your comment
Comment 0 characters remaining

Company Snapshot

We're talking about:


Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

People who fall victim to Ponzi scams are:

Previous results · Suggest a vote