Are Prices Bumped Up by Mideast Conflict?
Reacting to the increasing conflict between Gaza and Isreal, oil prices rose Monday in Asia. Arab leaders protested the attacks, including Isreal’s deadliest ever against Gaza’s Hamas leaders on Sunday. Isreal views their actions as a response to rockets being fired into Isreal. Rockets continue to be fired as Isreal prepares its ground forces.
Isreal-Palestinian conflict may put a quick price increase on the board, but afterall, the conflict has been going on quite awhile! Regardless of the fear that supplies will be disrupted, the reality is that the fighting is not near oil fields or major ports.
Trading volumes have been low because of the holidays and will most likely stay low until after Jan. 20, when Obama is sworn in. His optimism and people’s expectations for better times may take some of the pressure off prices. The recent drop in the prime interest rate and various automobile buying incentives seems to be prodding the economy but not enough to show much profit for this fourth quarter.
In other trading, gasoline futures rose to 88 cents a gallon; heating oil gained 3.30 cents; natural gas for January delivery jumped 12.4 cents per 1,000 cubic feet. It is winter after all!