Global markets have been jolted by the outbreak of war between Hamas and Israel, with investors seeking the relative safety of commodities like gold and oil in uncertain times.
West Texas Intermediate rose to $87 a barrel, while Brent hit $89, a 5% surge since the conflict touched off. Still, oil is down from its September highs, just above $97, having plunged earlier in October, as reported by Bloomberg.
However, with the conflict still ongoing and threatening to expand into a regional conflagration, many observers are predicting that oil will soon hit triple digits and perhaps even $150 a barrel.
TJM Institutional Services director James Iuorio told Mornings with Maria on Fox Business that he expects “Oil is going back to $100 within the next couple of months.”
According to Zero Hedge, the price of oil slid due to overvaluation, recession fears, and the effect of mechanical sell-stop triggers. But all those considerations have been pushed aside by the fallout of Hamas’ surprise attack, which may see oil reach $150 a barrel.
The uncertainty has also prompted investors to seek the relative safety of gold, bonds, the dollar, and another currency: the Japanese yen, according to Bloomberg.
Globally, stock markets opened shaky until the Federal Reserve signaled that it was done lifting rates for the year, after which stocks rebounded, with the S&P 500 rising 0.6% by midday trading, per Bloomberg.
Fed Vice Chair Philip Jefferson signaled that bloated treasury yields would influence any potential rate hikes.
The Fed is “in a position to proceed carefully in assessing the extent of any additional policy firming that may be necessary,” Jefferson said in a speech at an economic conference in Dallas, per Bloomberg.
“Looking ahead, I will remain cognizant of the tightening in financial conditions through higher bond yields and will keep that in mind as I assess the future path of policy,” Jefferson said. “We are in a sensitive period of risk management, where we have to balance the risk of not having tightened enough, against the risk of policy being too restrictive.”
