Oil Prices Rise Slightly – Geopolitical Tensions in Focus

Oil prices slightly recovered after a two-day decline as market participants eagerly await a possible response from Israel to Iran's missile attack last week. Meanwhile, U.S. crude oil inventories rose more sharply than they have since April. Brent exceeded the $77 per barrel mark, while West Texas Intermediate approached the $74 mark. Geopolitical tensions remain high as markets are concerned about possible Israeli retaliation against Iran. Tehran has already warned of responding with thousands of missiles if necessary, stoking fears of a full-scale war. The oil markets are in turmoil amid the uncertainties. Volatility increased as hedge funds increasingly built long positions. U.S. President Joe Biden advised against an attack on Iran's oil infrastructure and spoke with Israeli Prime Minister Benjamin Netanyahu for the first time in over a month. Meanwhile, ongoing concerns about the economic situation in China are causing uncertainty. The absence of new large-scale stimuli from Beijing led to a broad sell-off in the markets, including the oil markets, at the beginning of the week. The central government announced a new press conference on financial policy for the weekend. In the U.S., crude oil stocks rose by 5.8 million barrels according to the government, the largest increase since the end of April, while gasoline inventories declined.