Commodity Daily News

Oil Prices Rise as Saudis Cut Production and Gaza War Prolongs

The price of Crude Oil increased dramatically yesterday by nearly 200 points to close at $38.92 a barrel. This marks a reversal for the black gold as the prices of this commodity have tumbled since the latter half of last week. The cause of Oil's price spike yesterday was due to Saudi Arabia cutting the production of oil more than they previously stated at OPEC's last meeting on December 17th. This comes about as Arab regimes have lost alarming amounts of money due to Oil's drop of over $100 a barrel since July. The Saudis used this act as a precedent to prevent Oil prices from falling further.

The prolonged war in Gaza has also added to uncertainty to Oil prices. This is the case, because the Israel-Gaza War was originally expected to last a maximum of 1-2 weeks. Yet the War will soon be in its 4th week. What fears people most is a possible escalation of the War, which may lead to a wider regional conflict. As long as these fears exist, Oil is unlikely to fall below $35 a barrel in the coming week.