Oil Soars Above $59 As Middle East Airstrikes Jolt Markets
West Texas Intermediate crude prices rebounded sharply on Tuesday, surging more than 3.6% to $59.10 per barrel by 10:00 a.m. ET, as escalating geopolitical tensions in the Middle East rattled energy markets.
The rally came after Israeli fighter jets launched a wave of airstrikes in Yemen, targeting Houthi-controlled infrastructure, including Sanaa International Airport, in retaliation for recent missile and drone attacks on Ben Gurion Airport that left several injured.
War Tensions Reverse Monday's Oil Slump
The sharp rebound in oil fully reversed Monday's losses, which had been triggered by OPEC+'s decision to increase output by 411,000 barrels per day starting in June, a move that prompted Goldman Sachs to slash its oil price forecasts.
But the latest developments out of the Middle East have shifted the narrative quickly, as traders reassess supply risk in a region crucial to global oil flows.
In a statement on social media X, the Israel Defense Forces (IDF) said it struck terrorist infrastructure used by the Iran-backed Houthi regime, including power plants and logistics hubs exploited for weapons transfers and tunnel construction.
The IDF emphasized it took steps to mitigate harm to civilians, adding, "The IDF is determined to continue operating—at any distance—against all threats posed to the citizens of the State of Israel."
Energy Stocks Show Muted Response
Despite the spike in crude prices, U.S. energy stocks remained broadly flat, reflecting a degree of investor caution following Monday's rout and continued uncertainty surrounding OPEC+ policy and global demand.
The Energy Select Sector SPDR Fund (NYSE:XLE) edged up just 0.1% following a 1.8% slump a day earlier. Exxon Mobil Corp. (NYSE:XOM) gained 1% and Chevron Corp. (NYSE:CVX) rose 0.2%.
Top performers within the XLE ETF included:
- APA Corp. (NASDAQ:APA) up 1.3%
- Occidental Petroleum Corp. (NYSE:OXY) up 1.9%
- ConocoPhillips (NYSE:COP) up 2.2%
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