The potential for continued conflict and geopolitical instability in the Middle East, including incidents such as missile interceptions and tensions in the region, could push oil prices upward.
Consequently, it could be prudent to invest in robust energy stocks Weatherford International plc (WFRD – Get Rating), Valero Energy Corporation (VLO – Get Rating), and Cheniere Energy, Inc. (LNG – Get Rating), which stand poised to leverage the impending surge in oil prices. Let’s understand this in detail.
In the Red Sea, a U.S. Navy warship has actively intercepted three missiles originating from Yemen. This incident hints at a potential targeting of Israel. These developments signal a deepening Middle East conflict, coinciding with reports of Israel fortifying its border with Lebanon, the stronghold of Hezbollah.
Additionally, the AP reported another strike in Iraq, specifically aimed at U.S. and coalition partner forces near Baghdad International Airport. This development undoubtedly heightens concerns regarding an intensification of Middle East tensions, evident in the surge of oil prices in response to the news.
Brent, the global benchmark, has surpassed $93 per barrel, while West Texas Intermediate has approached $91. Earlier in the week, oil prices had receded due to the United States’ decision to revoke sanctions on Venezuelan oil. However, this recent military escalation seems to have offset that development.
This broadened unrest could push oil prices above the $100 per barrel mark. After a brutal explosion at a Gaza hospital, raising the stakes of the conflict, ActivTrades analyst Ricardo Evangelista said, “This scenario would almost certainly affect the global oil supply and could drive the price of the barrel to levels above the $100 mark.”
In light of these trends, let’s look at the…
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