Crude oil prices jump over $91/barrel after ninth US military strike on Iran; gold rises 0.3%

Crude oil prices in the global market surged nearly 4% to over $91 per barrel (bbl) during the early trading session on Monday, July 20, after investors focused on the ninth consecutive US military strike on Iranian targets amid no signs of a near-term end to the West Asia conflict.

“US Central Command (CENTCOM) successfully completed the ninth consecutive evening of strikes against Iran, July 19, at 10 pm (ET),” said CENTCOM in an official statement released on Monday morning, India time.

Investing.com data showed that the global benchmark Brent crude oil futures price surged around 4% to $91.41 per bbl on Monday’s market, compared to $88.1 per bbl at the previous commodity market close.

Crude oil prices were rising as global investors fear another upcoming period of supply chain disruption if Iran shuts down the key maritime oil trading route, the Strait of Hormuz, following the recent attacks in West Asia.

Key focus of investors this week will remain on monitoring the escalations between Iran and the United States, as global energy prices are now reacting to the evolving developments rather than the fundamental factors.

If the escalations are prolonged amid the absence of a final peace agreement, which was supposed to be negotiated within 60 days from the first peace MoU between the two countries, the West Asia conflict can further weigh down the overall market sentiment.

Oil prices today

At 9:33 am (IST), the Brent crude oil prices were trading 2.6% higher at $90.40 per bbl after the day’s high levels on Monday’s market, compared to $88.1 per bbl at the previous commodity market close, as per Investing.com data.

The data further showed that the Brent crude oil prices have surged 8.5% in the last five trading sessions, and have risen 13% in the last one-month period amid the fresh round of attacks between the two countries.

Although energy prices remained flat on a three-month basis, oil prices have rallied 40% in the last six months in the global market.

Meanwhile, the US-based West Texas Intermediate (WTI) crude oil prices were trading 2.3% higher at $83.73 per bbl on Monday, July 20, compared to $81.78 per bbl at the previous market close, as per the exchange data.

WTI crude oil prices surged to hit an intraday high of $84.59 per barrel on Monday’s market after the ninth round of attack against the West Asian country.

US attacks on Iran

On Sunday, July 19, the United States carried out strategic targeted military attacks against Iran, destroying military command centres, air defence and coastal surveillance sites, maritime capabilities, missile and drone launch sites, and communications networks.

US Central Command said that targeted attacks were in an effort to further reduce Iran’s ability to attack commercial ships and civilian mariners transiting through the Strait of Hormuz.

“The US military is holding Iran accountable at the Commander in Chief's (Donald Trump) direction. CENTCOM forces remain highly vigilant, focused, lethal, and ready,” according to the official statement.

Latest reports from CNN showed that on Sunday, a US military service member was killed in action during a controlled detonation of a downed Iranian drone. This marks the third death on the American side, which comes after two service members lost their lives in Jordan last week.

On the oil trade front, although Iran earlier claimed that they have closed the Strait of Hormuz, the US side said that the key trading route remains open for oil passage amid the continued strikes in the region.

Gold prices rise 3%

Comex gold prices at the New York Mercantile Exchange were trading around 3% higher at $4,030 per ounce on Sunday evening in the United States, compared to $4,018 per ounce at the previous commodity market close.

On Monday’s market, India time, gold prices were trading higher due to the rising safe-haven demand in the global market against the backdrop of the West Asia escalations and a marginally lower US dollar rate.

Traders are likely to buy higher quantities of commodities like the precious metal gold if the US dollar price is lower in the market to receive a higher quantity at a lower price.

Bloomberg US dollar spot index data showed that the US greenback was trading around 0.05% lower at 100.719, compared to the previous currency market close.