Crude oil prices closed 5% higher in New York trading on October 3 as tensions in the Middle East continue to escalate.
West Texas Intermediate (WTI) crude oil, the U.S. benchmark, rose 5.39% to finish trading on the New York Mercantile Exchange at $73.89 per barrel. That was its highest close since August 29 of this year. Brent crude oil, the global standard, climbed 5.22% to $77.76 a barrel, its highest level since August 30.
The latest gains pushed both WTI and Brent crude oil into positive territory for the year, with each benchmark now up about 1% since January. Before this latest escalation in the Middle East, oil prices had languished near multi-year lows due largely to demand concerns in China, the world’s largest energy market.
The surge in crude oil prices comes as markets await Israel’s response after Iran fired a barrage of missiles at the country, an escalation that analysts and political leaders say could lead to a broader war across the Middle East. There is speculation that Israel may strike Iran’s oil facilities in retaliation for the latest attack.
Oil Stocks Rise
Analysts and traders say there is a real possibility that the widening conflict in the Middle East will disrupt global crude oil production and supplies, which could further raise prices in the near-term. All eyes are now on the Strait of Hormuz, a key trade route for oil tankers and Iranian oil shipments.
The rise in crude prices has sent stocks of oil producers higher as well. Oil major Chevron’s (CVX) stock has gained 6% in the last five trading sessions, while Exxon Mobil (XOM) has seen its share price rise 8%. Until now, most oil stocks had traded in negative territory this year.
Is Chevron Stock a Buy?
Chevron stock has a consensus Moderate Buy rating among 13 Wall Street analysts. That rating is based on eight Buy and five Hold ratings assigned in the last three months. There are no Sell ratings on the stock. The average CVX price target of $173.08 implies 14.43% upside potential from current levels.
