War Premium Unwound As Demand Worries Come To The Fore

Oil prices fell sharply on Monday as demand concerns outweighed the continued conflict in Israel/Gaza with Netanyahu saying that Israel would not agree to a ceasefire with Hamas. Diplomatic efforts continue to try and prevent a spread of the conflict. Risk events this week, including a Fed meeting and US payrolls, are keeping the demand outlook to the fore. The USD index fell 0.4%.

• WTI fell 3.5% to $82.58/bbl with most of the down move in the European afternoon. It is close to the intraday low of $81.82. Key support is at $80.20, October 6 low. WTI is now down 7% on the month and the war premium has been unwound.
• Brent is 2.9% lower at $86.64/bbl. It reached an intraday low of $85.81 coming close to support at $85.18, October 12 low. The bear trigger is at $83.44. Brent is 4.1% lower in October.
• Russia is planning the highest exports in 3 months for November. On the demand side, Saudi may not increase selling prices to Asia for the first time in 6 months due to weak demand from China, according to Bloomberg.