Following Israel-Hamas conflicts, oil prices increase due to supply fears

 Following Israel-Hamas conflicts, oil prices increase due to supply fears

After Hamas' unexpected assault on Israel over the weekend, tensions in the Middle East grew, and crude oil prices increased on concerns of a wider war.

Globally, investors have begun to avoid riskier investments like equities in favor of gold, bonds, and the US currency.

Fears of a tighter supply caused a 5% increase in oil prices, pushing Brent crude futures to $89 per barrel and US crude futures to $87 per barrel. 

Fears of a tighter supply caused a 5% increase in oil prices, pushing Brent crude futures to $89 per barrel and US crude futures to $87 per barrel. 

Following Israel's directive to close the Chevron Corp.-operated Tamar gas field in the eastern Mediterranean, natural gas prices in Europe also increased.

The most recent Middle East war broke out amid continuous geopolitical tensions and anxiety about the expansion of the world economy.

As confrontations between Israel and the Palestinian Islamist party Hamas intensified political unrest in the area and heightened worries about the oil supply, international investors have become risk-averse.

In reprisal for one of the worst assaults in modern history, in which Hamas terrorists murdered hundreds of Israelis and kidnapped dozens more, the Israeli military said on Monday that it had attacked hundreds of Hamas and Islamic Jihad targets in the Gaza Strip overnight.

Israel also claimed that its military had shot dead armed intruders coming into the country from Lebanon, fueling concerns that the conflict might now include two fronts.

The US market indexes on Wall Street decreased on Monday.

The Dow Jones Composite Average was down 13.18 points, or 0.04%, at 33,394.40 at 11:33 a.m. ET. At 4,301.83, the S&P 500 was lower 6.67 points, or 0.15%. At 13,355.57, the Nasdaq Composite was down 75.77 points, or 0.56%.

With a 3.6% increase, the energy sector led all other sectors in the S&P 500.

Due to military conflicts in the Middle East, European equities dipped on Monday.

Leading the decline in the pan-European STOXX 600 index were firms in the retail and travel & leisure industries.

In Europe, the energy index increased 2.9% due to higher oil costs.