Global oil prices climbed higher Wednesday, lifting U.S. crude closer to $90 a barrel, as the bombing of a hospital in Gaza further enflamed the escalating conflict between Israel and Hamas on the eve of a visit from President Joe Biden.
The bombing, which took place around 7:00 pm local time in Gaza at the Al-Ahili al-Arabi hospital, may have killed as many as 500 people, according to Hamas officials, although its origin remains an issue of dispute.
Israel claims the strike was the result of a malfunctioning Hamas rocket, aimed at Tel Aviv, while officials in Gaza insist it was a targeted effort on the part of the Israeli Defense Force.
Jordan, as well as Palestinian leader Mahmoud Abbas, cancelled planned meetings with Biden following the bombing, while officials in Arab states around the region denounced Israel while Saudi Arabia called on the international community to abandon "double standards and selectivity in the application of international humanitarian law."
Iran's Foreign Minister, Hossein Amirabdollahian, then called for member states in the Organisation of Islamic Cooperation to impose and oil embargo on Israel.
“Clearly, the US is a major influence in the Middle East due to its economic interests, military presence, national security concerns, strategic alliances, and diplomacy efforts," said Nigel Green of London-based financial advisory deVere Group.
“If the US President – who is, of course, one of the major powerbrokers - fails to cool rising tensions in the Middle East during his visit to the region, we expect oil prices to surge further,” Green added. "A prolonged crisis in the Middle East will disrupt oil supply chains (which will) cause supply shortages, pushing up oil prices.
Brent crude futures contracts for December delivery, the global pricing benchmark, were last seen $1.35 higher in the early New York session at $91.24 per barrel.
WTI futures for November delivery, which are more-closely linked to U.S. gasoline prices, were marked $1.50 higher at $88.16 per barrel following Energy Department data that showed domestic crude supplies fall by 4.5 million barrels last week, while holdings at the nation's strategic petroleum reserve held steady at 351.27 million barrels.
On Wall Street, Exxon Mobil (XOM) -) shares were marked 1.67% higher in early Wednesday trading at $113.25 each, while Chevron (CVX) -) gained 1.2% to $169.59 each.
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