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OIL: Crude Holds Losses Post Israel News

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Oil prices have held onto the majority of the losses that eventuated after the release of news that Israel told the US that it would not target Iran’s oil and nuclear infrastructure but would focus on military sites (Washington Post). Crude markets had built in a geopolitical risk premium on worries that Iran’s oil production could be impacted by an Israeli retaliation. Iran is the third largest producer in OPEC.

  • WTI is down 2.9% to $71.66/bbl today, a clear break below support at $72.33 20-day EMA. The benchmark is off its intraday low of $71.37 reached early in the session. The USD index is 0.1% higher.
  • Brent is 3.0% lower at $75.17/bbl after a low of $74.99. It has also spent the session trading below the 20-day EMA of $75.81.
  • With geopolitical worries easing, the focus is likely to centre on the supply/demand outlook, especially for China. Disappointing fiscal announcements and trade data have weighed on commodities. OPEC’s downward revision to the 2024 and 2025 demand outlook for the third straight month also pressured oil prices.
  • The Fed’s Daly and Kugler appear and US October Empire manufacturing and September NY Fed inflation expectations as well as UK employment/wages, ECB bank lending survey, euro area October ZEW & August IP, and September Canadian CPI print.
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Oil prices have held onto the majority of the losses that eventuated after the release of news that Israel told the US that it would not target Iran’s oil and nuclear infrastructure but would focus on military sites (Washington Post). Crude markets had built in a geopolitical risk premium on worries that Iran’s oil production could be impacted by an Israeli retaliation. Iran is the third largest producer in OPEC.

  • WTI is down 2.9% to $71.66/bbl today, a clear break below support at $72.33 20-day EMA. The benchmark is off its intraday low of $71.37 reached early in the session. The USD index is 0.1% higher.
  • Brent is 3.0% lower at $75.17/bbl after a low of $74.99. It has also spent the session trading below the 20-day EMA of $75.81.
  • With geopolitical worries easing, the focus is likely to centre on the supply/demand outlook, especially for China. Disappointing fiscal announcements and trade data have weighed on commodities. OPEC’s downward revision to the 2024 and 2025 demand outlook for the third straight month also pressured oil prices.
  • The Fed’s Daly and Kugler appear and US October Empire manufacturing and September NY Fed inflation expectations as well as UK employment/wages, ECB bank lending survey, euro area October ZEW & August IP, and September Canadian CPI print.