Crude Rises On Escalating Conflict In Middle East, US Stocks Down

Oil prices are over 1.5% higher on Wednesday as tensions rose further in the Middle East. The market remains alert to risks to supply. US President Biden still visited Israel after the Jordan summit was cancelled following an explosion at a Gaza hospital which Biden then stood behind Israeli claims that it had been hit by an Islamic Jihad rocket. The conflict also seems to be escalating with Hezbollah in the north.

• Brent rose 1.6% to close at $91.34/bbl. It rose to a high of $93 in European trade but trended down to a low of $90.60 before moving sideways through the NY session. The bull trigger is at $95.35, September 28 high.
• WTI is 1.8% higher at $88.20/bbl. It approached $90 reaching an intraday high of $89.88 and then fell to $87.20. It is up 0.5% this week and 6.5% since the Hamas attack on Israel. WTI has started Thursday slightly higher at $88.24. The bull trigger is at $95.03, September 28 high.
• The US government has responded to the agreement between Venezuela’s government and the opposition on terms for a fair election. The US has suspended some sanctions not only on oil but also gas and gold and has issued licenses.
• OPEC currently won’t hold a meeting or take actions in response to Iranian calls for an oil embargo on Israel, according to Reuters. Most of Israel’s oil imports come from outside the Middle East.
• US official EIA data reported a 4.49mn barrel crude inventory drawdown. Stocks at Cushing fell to their lowest since 2014 and are close to minimum operating requirements. Distillate fell 3.19mn barrels and gasoline -2.37mn. US oil exports rose strongly.