Crude Lower But Watching And Waiting

Oil prices are down over a percent during APAC trading following Friday’s rally. Stronger-than-expected US data at the end of last week ahead of the November 1 Fed meeting, and the restrained start to the ground offensive into Gaza have meant that there has been payback for the sharp rise in prices. The USD index is flat.

• WTI is down 1.5% to $84.24/bbl and off the intraday high of $85.30. Brent fell 1.2% to $88.10 after a low of $87.51. It approached $89 earlier but reached a high of $88.94.
• Bloomberg is reporting that Israel is taking the offensive into Gaza one day at a time rather than making one large incursion. Markets are watching closely for signs that the conflict is spreading outside of Israel/Gaza.
• Physical indicators are showing the market is easing. And net futures positions as reported by CFTC fell almost 6k contracts to 300.8k in the latest week.
• Later US October Dallas Fed manufacturing, euro area October confidence, Q3 German GDP and September CPI are released. Also ECB’s de Guindos speaks. The Fed meeting on Wednesday and payrolls on Friday are the key events this week for oil markets.