Oil Rises as Middle East Tensions Flare Amid Israeli Strikes
Oil surged for a second day as Israeli airstrikes and a report about a potential retaliatory attack from Iran keep traders on alert for supply disruptions from the Middle East.
West Texas Intermediate spiked above $70 a barrel in late trading after Axios reported that Iran is preparing a major retaliatory strike on Israel out of Iraq — another major OPEC producer. WTI had earlier settled 1% higher at around $69 a barrel.
Fighting is still underway despite Israel signaling that it’s open to ending the conflict in Lebanon earlier this week. An airstrike on what Israel described as a local Hezbollah fuel depot on Wednesday set off a massive blast, killing at least 19 people. A rocket fired from Lebanon struck an agricultural area in northern Israel, killing five, according to a news report.
Top hedge fund manager Pierre Andurand has returned to the oil market with long positions in futures and options, according to a letter to investors seen by Bloomberg. He expects higher oil prices as a result of the ongoing conflict in the Middle East, the letter said.
Prices earlier pared gains after another EIA report showed that US crude output increased 1.5% in August to a record 13.4 million barrels per day, a reminder of rising non-OPEC supply. US inventories of crude, gasoline and distillates — a category that includes diesel — all declined last week, according to the US Energy Information Administration.
WTI’s prompt spread — the difference between its two nearest contracts — has widened to 49 cents in backwardation, which signals tighter supply-demand balances in the short term. But several major events — including next week’s US elections and a looming OPEC+ decision on output plans for December — are keeping traders on edge about the market’s direction.
WTI for December delivery climbed 1% to settle at $69.26 a barrel in New York. Brent for January settlement rose 0.9% to settle at $72.81.
Source : Bloomberg
