US oil prices up nearly $3 as Middle East crisis constrains supply

Core Viewpoint - U.S. oil prices have increased significantly due to supply constraints from the ongoing conflict in the Middle East, particularly the war involving Iran, which has led to a reduction in Gulf oil supplies by approximately 15 million barrels per day [1][1]. Group 1: Oil Price Movements - U.S. West Texas Intermediate crude oil prices rose by $2.90 per barrel, or 3.5%, reaching $86.33 in early trading [1][1]. - Crude oil prices had previously surged to a session high above $119 per barrel, marking the highest level since June 2022 [1][1]. - Market analysts expect crude oil prices to remain highly volatile, trading within a range of approximately $75 to $105 in the near term [1][1]. Group 2: Supply and Demand Dynamics - The ongoing conflict in the Middle East is cutting Gulf oil and oil products supply by around 15 million barrels per day, which could potentially drive crude prices up to $150 per barrel according to Wood Mackenzie [1][1]. - U.S. crude, gasoline, and distillate stocks have decreased in the past week, indicating higher demand in the market [1][1]. Group 3: International Response - G7 leaders are convening to discuss the impact of the Middle East conflict on energy supplies and are considering the release of emergency oil stockpiles to mitigate market disruptions [1][1]. - French President Emmanuel Macron is set to host a video call with other G7 leaders to address the situation [1][1].