Could Middle East Tensions Push Oil Prices Above $100/Barrel? Bernstein weighs By Investing.com

Investing.com — Oil prices rose on Thursday as Hurricane Milton pounded Florida, adding to concerns about potential supply disruptions in the Middle East.

By 09:29 ET, the contract was up 1.4% at $77.66 a barrel, while futures (WTI) traded 1.4% higher at $74.27 a barrel .

Both contracts are down about 5% over the past two sessions and have gained 10% over the past week.

In the US, Hurricane Milton made landfall in Florida, and although the storm largely avoided oil infrastructure in the Gulf of Mexico, it has already increased demand for gasoline in the state, which has helped support crude oil prices.

In addition, traders remained uncertain about a potential escalation of the Middle East conflict, especially if Israel targets Iran’s oil facilities. Iran currently produces 3.3 million barrels per day of crude oil.

“If domestic refining capacity is affected, then it would leave more crude oil available for export. On the other hand, any damage to Iran’s upstream assets would pose an upside risk to oil prices. For now, real-time shipping data shows Iran’s oil export. are stable,” strategists at Bernstein said in a note to clients.

Analysts have signaled that any major disruption to oil flows in the region could push crude prices up to $100 a barrel.

Prices could even break above $100 a barrel if the conflict prompts Tehran to close the Strait of Hormuz, a crucial choke point for shipping, Bernstein analysts said. At that level, they warned that oil demand could start to deteriorate.

“While it is not our base case for oil to reach $100, this cannot be ruled out in the near term,” the analysts noted.

However, they predicted that if further tensions were avoided, oil prices could fall to $70 a barrel in the short term.