Oil prices rise after Iran missile attack on Israel

Oil prices rose above $75 a barrel after Iran launched a missile attack on Israel in the latest escalation of the conflict in the Middle East.
One-month futures contracts for Brent crude, the international benchmark price, had been trading at $70 a barrel on Tuesday evening before Iran, the regional power that backs militant group Hezbollah, began its attack.
The rise in the price of Brent crude lifted the shares of London’s oil majors, Shell and BP, which gained by 2.8 per cent and 2.7 per cent respectively on Wednesday morning. Gold dipped 0.3 per cent to $2,654 an ounce as a firmer dollar partially offset safe haven demand.
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Prior to the reports, oil was trading near a two-week low as weak global demand and the outlook for increased supply had outweighed concerns over conflict in the region.
A number of ministers from the Opec+ producer group will meet on Wednesday to assess the market but it is expected that no policy changes will be made. Opec+ includes the 12 members of the Organisation of Petroleum Exporting Countries and another group of crude producers led by Russia.
At a meeting of energy ministers from the Opec+ group in June, the oil production cartel set out a path for some of its members to unwind some of the production curbs put in place at the end of 2022. Beginning in December, Opec+ is scheduled to increase oil output by 180,000 barrels a day each month.
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The cartel agreed to deep production cuts in late 2022, which have totalled 5.86 million barrels a day, equating to about 5.7 per cent of global demand. These have played an important role in putting a floor under oil prices in an effort to allay demand concerns.
During the Covid-19 pandemic, oil prices slipped to lows of about $20 a barrel. In 2022 they climbed to a peak of near $120 a barrel following Russia’s invasion of Ukraine.
Last month the price of Brent crude slipped back to a low of $69.19 a barrel, with the United States increasing its production.