Crude Lower As Israel Delays Next Phase

Oil prices fell around 2% as negotiations to release more hostages continue to delay an Israeli ground offensive into Gaza. Two elderly women were released on Monday. The lower dollar (USD index -0.5%) didn’t support prices as events in the Middle East continue to drive crude moves.

• Brent fell 1.8% to close around $90.45/bbl. It broke below $90 briefly a number of times during the NY session with the intraday low at $89.62. During European trading Brent rose to a high of $92.45. Support is at $88.08, the 50-day EMA.
• WTI is down 2.2% to $86.13/bbl. There were a number of short breaks below $85.50 with the low at $85.35. Earlier WTI rose to $88.29. Support is at $84.06.
• JP Morgan said in recent research that Brent is overinflated by around $7/bbl and that apart from the 1973 Yom Kippur war, conflict in Israel hadn’t resulted in a long lasting impact on oil prices, as reported by Bloomberg.
• Vortexa is reporting that crude in floating storage has fallen to a four year low. According to Reuters China used some of its crude inventory in September to refine. US stocks have also been trending lower. API data is released later today.