Oil prices were up a fraction on Thursday morning despite news that Israel, one of the states in the Middle East not burdened with massive oil reserves, has struck oil. Afek Oil and Gas, an Israeli oil exploration firm, said that it had found a reserve of oil in the Golan Heights, near the country’s border with Syria.
The find could be a big change in the way Israel supplies itself with oil, and the geopolitical state of the Middle East, but there’s no telling, just yet, how big the reserves might be. Afek Oil and Gas, which is owned by US oil firm Genie Energy Ltd , said it had no way to tell how big the pocket was just yet.
Oil markets discount Israel find
There are lots of sources of oil found around the works on a regular basis, and many of them are too small, or too hard to get to, in order to exploit properly. Afek says that it has high hopes for the find, however. “We are talking about significant quantities. The important thing is to know the oil is in the rock and that’s what we now know,” the firm’s chief geologist Yuval Bartov told Israel’s Channel2 TV station.
It’s likely that, even though the firm seems sure that there’s oil to be had in the Golan Heights, it will take a very long time to get pumping. New oil projects can take a long time to get going under normal circumstances. Golan Heights is, however, very close to the civil war being fought in Syria, and the area has taken more than one stray rocket since the conflict began in 2011.
There are much closer risks to the price of oil than supply coming from Israel, and few traders were looking at the news of Israel’s latest find as a major catalyst on Thursday. VelocityShares 3X Long Crude ETN was up on Thursday, part of a trend that’s been going since the start of the month.
VelocityShares 3X Long Crude ETN
VelocityShares 3X Long Crude ETN shares were selling for less than $10.50 on October 1, but had risen to $13.08 at time of writing on Thursday. Oil has been testing a rise in the days since the start of the month, though it’s far from certain what way the black liquid will go in the coming weeks.
Brent oil traded above $52 on Thursday, while crude in the Us rose to $48.38. That rise may be tempered by news that stores of the energy source in the US are still rising. Crude stocks rose by 3.1 million barrels to 461 million last week, a larger rise than analysts were expecting.
Saxo Bank strategist Ole Hansen told Reuters that “The rebalancing process has started, but the question is obviously the pace of it and I think that’s where the problem of the market is – it may be getting a little too excited.”