U.S. crude oil rose above $73 a barrel on Tuesday as the market braces for an attack by Iran against Israel and Wall Street rallies after the sell-off in the previous session.
West Texas Intermediate closed at a six-month low on Monday after equity markets sold off on fears that the U.S. economy might tip into a recession.
But oil prices stabilized as the S&P 500 and Dow Jones Industrial Average staged a comeback Tuesday. Escalating tensions in the Middle East also appear to be providing a floor for oil prices. Israel is preparing for an attack by Iran after Hamas leader Ismail Haniyeh was assassinated in Tehran last week.
“It is this major shoe that we’re waiting to see drop here that is keeping these prices somewhat stable,” John Kilduff, founding partner of Again Capital, said on CNBC’s “Power Lunch” on Monday. “If we weren’t having this tumult in the equity markets and capital markets generally, we’d be a lot higher.”
Here are Tuesday’s closing energy prices:
- West Texas Intermediate September contract: $73.20 per barrel, up 26 cents, or 0.36%. Year to date, U.S. crude oil has gained 2.16%.
- Brent October contract: $76.48 per barrel, up 18 cents, or 0.24%. Year to date, the global benchmark has declined 0.73%.
- RBOB Gasoline September contract: $2.32 per gallon, little changed. Year to date, gasoline is up 10.63%.
- Natural Gas September contract: $2.01 per thousand cubic feet, up nearly 7 cents, or 3.5%. Year to date, gas is down 20%.
The oil market has largely looked past geopolitical tensions in the Middle East as crude supplies have not faced any major disruption. Analysts have warned for months that a direct conflict between Israel and OPEC member Iran could lead to a disruption of oil flows.
A rocket attack on a U.S. base in Iraq is believed to have injured several American personnel, a defense official told NBC News.
“It’s quite striking that the oil market so far is not preemptively pricing in the risk of what seems to be a very imminent conflict,” Daniel Yergin, vice chairman of S&P Global, said on CNBC’s “Squawk Box” on Tuesday.