December 29, 2008
Crude oil rose the most in two weeks after Israeli air strikes in the Gaza strip raised concerns that supply from the Middle East, the world’s largest producing region, may be disrupted.
Defense Minister Ehud Barak said Israel is fighting a “war to the death” with Hamas, the group that controls Gaza. Prices also advanced as China, the world’s second-biggest energy consumer, said it will supplement its emergency oil stockpiles while prices are low, while Libya and the United Arab Emirates announced compliance with OPEC output cuts agreed on this month.
“The instability in the Middle East may well push oil prices higher,” said Rob Laughlin, a senior broker with MF Global Ltd. in London. “China’s plans to stockpile crude may take up some slack from the demand destruction from the economic slowdown.”