Oil Prices Plummet After Brief Surge Past $100
The global oil market experienced a significant downturn on Friday as Brent North Sea crude prices fell below $100 per barrel. This comes after the contract surged past the key milestone of $100 the previous day due to escalating Middle East strikes, which had helped US and European stock markets stabilize.
The Brent contract dropped by approximately 4% to under $97 a barrel, having soared by 7% on Thursday. The key US contract, West Texas Intermediate, declined more than 3% after gaining over 6% the previous day.
The sharp increase in oil prices had been triggered by Yemen's Houthi rebels striking oil tankers in the Red Sea, potentially opening a new front in the Middle East war. However, relief was felt on markets that some ships were still able to pass through the Bab al-Mandeb Strait, a crucial passage into the Red Sea.
Giovanni Staunovo, a commodities analyst at Swiss bank UBS, noted that while there is still uncertainty surrounding the situation, 'ships with Saudi crude are still crossing...so for now, it is not a full blockade, reducing a bit the risk of an even tighter oil market.'