Oil prices started the week with a significant bullish price gap due to the unexpected Hamas attack on Israel during the weekend. As the subsequent days revealed that the conflict appeared to remain confined to Israel and the Gaza Strip, without broader destabilization across the Middle East region, which constitutes a significant portion of global oil supply, crude prices began to recede from Monday's gains. Nonetheless, concerns arose as Israel issued evacuation orders for civilians in the northern Gaza Strip, hinting at a potential Israeli ground invasion which prompted condemnation from Arab leaders, raising apprehensions of potential regional spillover. These worries have become a driving factor behind the current surge in oil prices, with some investors taking long positions in anticipation of an escalation in hostilities over the weekend and while the overall situation becomes more uncertain. Analyzing the price of Brent Oil, it is evident that sellers managed to nearly fill the gap from Monday before prices started a rebound from the $85.50 per barrel range. The substantial upward movement observed today has propelled oil above an important resistance zone as well as above Monday's highs. While the weekend approaches and tensions rise, any major escalation in the conflict or spillover could lead to massive repercussions for oil prices as well as the general market sentiment and potentially drive oil to a new high bringing back once again concerns of a rise in inflation across the globe.
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