Oil End of Day Summary: Crude Spikes on Potential Israeli Ground Invasion

Crude Prices spiked following comments by the IDF implying expansions of operations into Gaza. WTI has been volatile throughout the day, as conflicting headlines clouded the market’s assessment of the risk of further escalation. Despite the surge late Friday, WTI is set to finish the week around 2.7% below where it started.

• WTI DEC 23 up 2.8% at 85.52$/bbl
• WTI-Brent down -0.18$/bbl at -4.96$/bbl
• IDF Spokesman Rear Adm. Daniel Hagari says the military has ramped up airstrikes in the Gaza Strip in the last few hours: "The Air Force is striking underground targets very significantly. Ground forces are expanding the ground activity this evening."
• Iran's Foreign Minster Hossein Amirabdollahian warned at the UN on Thursday that if Israel's retaliation against Palestinian militants Hamas in the Gaza Strip doesn't end then the US will "not be spared from this fire." - stoking tensions ahead of the latest strikes.
• US total rig count rose by one in the week to 625, according to Baker Hughes Oct. 27. This is the highest since Sep. 22.
• Physical crude markets have been more reflective of underlying economic weakness, a factor adding as another drag on oil at present, with signs of weak economic demand such as poor refined fuel demand figures in Europe and crude stockpile builds in the US. Physical barrels of sweeter grades like WTI are also being impacted by its high gasoline yield.
• About 250kbpd of Venezuelan crude, currently going to Asia could be diverted to the US Gulf following last week’s sanctions easing according to Valero’s COO Gary Simmons Thursday.
• Kazakhstan could boost oil exports to Germany to 2mn t/yr, from 1.2mn t/yr vi the Druzhba pipeline, the Kazakh Energy Minister Almasadam Satkaliyev said, cited by Interfax.
• Some oil tankers are achieving over $100,000/day in Europe according to Baltic Exchange data reported by Bloomberg, surging to the highest levels since late 2022. The move is driven by ships travelling longer distances and a risk premium added because of Middle East escalations.
• North Sea Sverdrup crude loadings are set to rise to 755k b/d in December – up from 702k b/d in November according to a loading program seen by Bloomberg.
• Chevron aims to raise its production in Venezuela to 150,000 bpd by the end of the year – 15% above current levels according to company CFO Pierre Breber.