Crude Higher As Tensions Build & US Stocks Fall

Oil prices finished over a percent higher as the conflict in Israel/Gaza continues and the US saw a higher-than-expected crude stock drawdown. Biden was scheduled to visit Israel and Jordan today to continue efforts to defuse tensions but the Jordan summit has now been cancelled following Egypt and Palestine’s leaders pulling out over the bombing of a hospital in Gaza. This may add to oil’s war risk premium.

• Brent rose 1.4% to finish above $90 at $90.88/bbl. It fell to a low of $88.88 in the NY session but then rallied to a high of $90.93. Resistance is at $91.56, the October 3 high.
• WTI is 1.2% higher at $87.71/bbl, close to the intraday high, after a low of $85.60. Resistance is at 89.59, October 4 high.
• Bloomberg is reporting that US crude inventories fell a more-than-expected 4.38mn barrels after rising 12.9mn in the previous week according to API data. Gasoline stocks fell 1.58mn.
• Venezuela’s government and opposition have agreed on terms to hold fair elections which will allow an easing of sanctions on oil shipments. The vote will be held in the second half of 2024 with five organisations invited to monitor it and all eligible candidates allowed to participate.