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Oil Prices Could Make a Run at $80

Analysts believe that oil prices “will likely hold” around $70 a barrel, “but could make a run at $80 if the conflict between the US and Iran spreads to the oil fields of southern Iraq or if harassment of commercial shipping intensifies
Oil Prices Could Make a Run at $80 Oil Prices Could Make a Run at $80

Oil prices could surge toward $80 a barrel if escalating geopolitical tensions disrupt Middle East crude supplies, analysts told CNBC on Friday, with energy market participants “on tenterhooks” after a US airstrike on key Iranian and Iraqi military personnel.
International benchmark Brent crude traded at $68.65 Friday morning, up more than 3.6%, having earlier spiked to an intraday high of $69.16.
US West Texas Intermediate stood at $63.38, over 3.5% higher, paring some of its gains after climbing to $63.84 earlier in the session.
Iran’s General Qasem Soleimani, who led a special forces unit of Iran’s elite Revolutionary Guards Corps, Quds Force, was martyred in an airstrike at the Baghdad International Airport early on Friday.
The same attack also martyred Iraq’s Abu Mahdi al-Muhandis, the deputy commander of militias known as the Popular Mobilization Forces, Reuters reported, citing an Iraqi military spokesperson.
The airstrike, which the Pentagon said was issued at the direction of President Donald Trump, has exacerbated already-high tensions between the US and Iran — and sparked concerns of retaliatory action.
In the hours after Soleimani’s death, “one thing is clear: Iran will respond,” analysts at political risk consultancy Eurasia Group said in a research note published Friday.
“We expect moderate to low-level clashes to last for at least a month and likely be confined to Iraq. Iranian-backed militias will attack US bases and some US soldiers will be killed; the US will retaliate with strikes inside of Iraq.”
Oil prices “will likely hold” around $70 a barrel, “but could make a run at $80 if the conflict spreads to the oil fields of southern Iraq or if harassment of commercial shipping intensifies,” they added.
“Maybe it is a bit early to draw really finite conclusions here about the overall impact on oil. After all, we just had the OPEC meeting where they reaffirmed cutting production further,” Valentin Marinov, managing director and head of G10 FX research at Credit Agricole, told CNBC on Friday.
“In addition, we also have expectations of oil output really peaking this year so chances are the move may continue,” Marinov said.
OPEC and non-OPEC allies, referred to as OPEC+, have agreed to cut oil production by an additional 500,000 barrels per day from January 1, further deepening their previous cut of 1.2 million barrels per day.

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