Middle East Tensions Keep Oil Prices Above $100
Oil prices declined on Friday but remained poised to remain above $100 for the second consecutive week due to simmering tensions in the Middle East. Brent, the benchmark for two-thirds of the world's oil, fell by 1.35% to $103.41 a barrel at 2:14 pm UAE time, while West Texas Intermediate (WTI) dropped 0.39% to $101.51 per barrel.
Despite the decline, financial markets have largely ignored the volatility in energy prices as they have 'already priced in quite a fair bit of that $100 per barrel of oil for now', according to Hou Wey Fook, chief investment officer of Singapore-based DBS Bank. He added that oil would need to rise to $160 to make a material impact on financial markets and that this scenario is not probable.
The volatility in oil prices comes as concerns over Saudi supply disruptions are being outweighed by anxiety about the widening Middle East conflict. The decline in oil prices follows a surge towards $110 a barrel on Monday after Saudi Arabia shut its East-West pipeline following attacks, deepening fears of a global supply crunch.