Rising tensions overseas could push oil prices to around $90 a barrel, one analyst said.
Prices were not far from those levels on Monday, with Brent crude (BZ=F) above $86 a barrel and West Texas Intermediate crude (CL=F) above $82 a barrel.
“The biggest concern in the market is the biggest geopolitical tensions we’re seeing in the Middle East,” Andy Lipow, president of Lipow Oil Associates, told Yahoo Finance on Monday.
Tensions between Israel and Lebanon’s Iran-backed Hezbollah militia have risen, raising concerns that a cross-border conflict could eventually involve Tehran more directly. Iran produces about 3 million barrels of oil per day, roughly 3 percent of global production.
“That’s a concern for the oil market because it could lead to supply disruptions across the Gulf region,” Lipow said. “Plus, we expect Brent crude prices to rise to around $90 a barrel as demand increases between now and the end of the year.”
Anton Petrus (via Getty Images)
Rising demand has also seen oil prices rise in recent weeks, with U.S. crude up 6% last month.
“The recent price increases are due to reduced crude and product inventories driven by increased road traffic demand and jet travel,” Dennis Kistler, senior vice president at BOK Financial, said in a recent note.
“Warming temperatures across most of the U.S. are also a positive for electricity demand,” he added.
Wall Street is widely expecting prices to fall next year as demand slows amid rising supply, with JPMorgan analysts predicting Brent crude will fall sharply from $83 in 2024 to an average of $75 in 2025.
Goldman Sachs maintained its target for next year to average $82 a barrel.
Inés Ferré is a senior business reporter at Yahoo Finance. Follow her on X. Follow.
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