Oil prices experienced a significant surge on Wednesday due to escalating tensions in the Middle East following a devastating explosion at a Gaza hospital, which raised concerns about potential disruptions in oil supply from the region.
Brent crude futures saw a rise of $1.75, equivalent to 2%, reaching $91.65 per barrel at 0609 GMT. Similarly, West Texas Intermediate crude (WTI) futures increased by $1.91, or 2.2%, reaching $88.57 per barrel.
During earlier trading sessions, both benchmarks soared by more than $2, reaching their highest levels in two weeks. In response to these events, Jordan decided to cancel a summit it was scheduled to host with U.S. President Joe Biden, as well as Egyptian and Palestinian leaders.
The cancellation of the summit between President Biden and Arab leaders is seen as diminishing the likelihood of a diplomatic resolution to the Israel-Hamas conflict, according to Vivek Dhar, an analyst at Commonwealth Bank of Australia, as noted in a client message.