Oil price & where to from here

Excerpt below from *s t o c k h e a d article

Should the conflict between Israel and Hamas spiral out of control, we could well see action from the Organization of Arab Petroleum Exporting Countries (OAPEC), which while sharing many members with OPEC, should not be confused with the broader cartel.

The last time OAPEC took action in October 1973 as the Yom Kippur War raged on, the oil embargo targeted at nations that supported Israel sent prices soaring nearly 300% from US$3 per barrel to nearly US$12 per barrel.

Of course a lot has changed since then – like the US now being a net explorer of oil – so a new embargo will be somewhat more limited in its impact, though it would still be painful.

Odds are though that cooler heads will prevail and such a move will not come to pass.

However, a widening of hostilities would more than likely lead to panic buying, which would in turn drive energy prices up, which works out to something similar on a smaller scale.