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Saturday, May 25, 2024

Oil prices rise, stocks slide over Iran-Israel tensions

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Oil prices rallied and equities fell Friday as reports said explosions had been heard in Iran and Syria, fueling fears of an escalation of the Middle East crisis after last weekend’s missile attack on Israel by Tehran.

In Manila, the Department of Energy said oil prices may have a mixed price movement next week due the volatility in world oil prices.

DOE director for the oil industry management bureau Rodela Romero confirmed a possible increase in gasoline prices and a rollback for diesel and kerosene.

She said gasoline may go up by P0.40 to P0.60 per liter while diesel may have a rollback of P0.60 to P0.85 per liter and kerosene by P0.60 to P0.80 per liter.

“These domestic pump adjustments are attributed to the lingering factors of geopolitical conflict in the Middle East and the unexpected reduction of fuel demand in big economies like China and US,” Romero said.

“However, analysts say that the volatility in the energy markets is expected to continue,” she said.

DOE data showed gasoline sells from P61.25 to P87.77 per liter, diesel from P54.30 to P82.90 per liter and kerosene from P74.29 to P86.04 per liter in the National Capital Region.

On April 16, oil players raised the price of diesel by P0.95 per liter, kerosene by P0.85 per liter and P0.40 per liter for gasoline.

Year-to-date adjustment of gasoline, diesel and kerosene stood at a per liter net increase of P9.70, P7 and P2.20, respectively.

Traders have been on edge since Saturday’s barrage by Iran, which Israel’s army chief General Herzi Halevi warned would be met with a response.

Leaders in Tehran said the strike was a legitimate response to a deadly attack on an Iranian embassy building in Damascus that it blames on Israel.

The news sent shivers through markets, with crude briefly surging as much as four percent on worries about supplies from the oil-rich region, while fears of a regional conflict saw equities tumble.

“It is now clear that the escalating shadow warfare between Israel and Iran… has finally ignited the powder keg in the Middle East, and we have moved decisively out of the shadows and into the glaring light of open conflict,” said Stephen Innes of SPI Asset Management.

“It should be noted that this is not a staged response to an Iranian drone attack but rather an indication that we have entered a new phase of this conflict, one that is likely to have significant and far-reaching consequences for Middle East peace and least of all risk markets.” With AFP


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