Oil extended its winning streak on Monday, buoyed by intensifying conflict in the Middle East following a drone attack on US troops in Jordan, while conflict between Houthi and the US-led coalition in the Red Sea continued.
The US West Texas Intermediate (WTI) crude oil futures for March delivery lifted 0.84% to $78.01 per barrel on January 29. Moreover, analysts expect an additional 0.54% increase to $78.43 a barrel in the coming market session.
RBC Capital analyst Helima Croft stated that they believed the death of three US soldiers in Jordan increased the prospect of greater involvement from the US in the war.
Several engagements in the Red Sea last week pushed the energy commodity to a 6.27% weekly gain. On Friday, a missile struck a Trafigura tanker carrying Russian petroleum in the Gulf of Aden, igniting the container vessel.
Houthi claimed responsibility for the attack on what they described as a British oil ship. Earlier that day, the militants fired a ballistic missile at the US Navy destroyer Carney, also in the Gulf of Aden.
Elsewhere, Russia announced a likely 127,500 to 136,000 barrel per day (bpd) drop in exports of the petrochemical feedstock naphtha. Moscow reduced exports by a third after fires disrupted refinery operations in the Baltic and Black Seas.
Additionally, the Organization of the Petroleum Exporting Countries and Allies (OPEC+) will meet online on February 01. Analysts predict the OPEC+ will maintain current oil production in March, with output for April and beyond to be decided afterward.
Middle East Conflict May Push Oil Over $80.00
Economists had warned that oil prices may exceed $80.00 per barrel if the confrontations between the Houthi-led forces and the US-led coalition continue.
On Sunday, the Houthi attacked a US base in the Middle East, killing three American troops and wounding 24 others. About 350 Army and Air Force personnel were stationed in the logistics support base to help fight against ISIS militants.
Defense Secretary Lloyd Austin vowed fierce retaliation and that the US will strike the rebels where it hurts. The Houthi rebels have displayed increasingly more sophisticated technology in their attacks in recent weeks.
The group on January 20 bombarded the US-occupied Ain al-Asad airbase in western Iraq with ballistic missiles, injuring four US troops. The Pentagon retaliated with airstrikes on Iranian Revolutionary Guard Corps (IRGC) bases, a government entity that trains and arms rebel groups.
