Many analysts glimpse at the map of the Middle East and, rightfully, believe that the conflict in Gaza should carry little impact on the price of Crude Oil. This is because Israel is nowhere near the oil reserves or shipping lanes in the region. Yet one thing is for certain, since the start of hostilities the price of Crude Oil has begun a relatively sharp appreciation, climbing as high as $48.50 a barrel, up from $37.00 just 5 days prior.
It could be argued that this conflict stirs emotions within Middle Eastern countries and influences them to cut supplies. More likely, however, is that American and European speculators believed that this would impact Crude Oil prices and therefore factored such speculation into the market no matter how right or wrong it may have been. As such, traders may begin to see the price of Crude Oil come back down over the next few days. This may happen because these speculators may consider the weight of the strengthening U.S. Dollar, and the lack of a real impact on the Oil markets this conflict actually brings, and return to their previous sell-pattern trading of Crude Oil