Israeli Attacks Raise Oil Prices

Fueled by uncertainty and heightened tensions between Israel and surrounding oil-rich Arab countries following the continued airstrikes by Israel on the Palestinian Gaza Strip, oil prices managed to trade up over $40 per barrel. Perhaps now the executives at Exxon Mobil (XOM) and Chevron (CVX) will send the Israeli government a nice “thank you” card.

Less than 2 weeks ago, oil prices had hit a multi-year low of $32.40 per barrel after dropping off a cliff from the mid-summer all-time high of $147.27. Though crude supplies have been reportedly unaffected so far by the continual bombings, uncertainty is anathema for keeping prices of valuable local commodities such as crude oil low.

Regarding two of the super-major integrated oil companies cited earlier - Exxon and Chevron - both companies are trading up over a percentage point thus far this morning, even though estimate revisions for both companies’ 4th quarter and fiscal 2008 have been lowered by several analysts in the past month.

Will this latest geopolitical turmoil be a catalyst for getting the roller coaster ride of oil prices back up again? If so, it will be a great assistance to the oil industry.

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