This post was originally published on this site
Oil futures bounced higher early Thursday, after traders briefly priced out most of the fear premium added to the U.S. benchmark earlier this week after the surprise Hamas attack on Israel.
Price action
-
West Texas Intermediate crude for November delivery
CL00,
+0.95% CLX23,
+0.95%
rose 69 cents, or 0.8%, to $84.18 a barrel on the New York Mercantile Exchange after trading at a session low of $82.78 a barrel, a penny below its Friday close at $82.79. -
December Brent crude
BRN00,
+1.13% ,
the global benchmark, rose 90 cents, or 1.1%, to $86.72 a barrel on ICE Futures Europe. Brent ended Friday had at $84.58 a barrel.
Market drivers
The latest reporting indicates Iran was aware that Hamas was planning an attack, but according to The Wall Street Journal, didn’t know the timing or scope of it. The report, citing U.S. intelligence agencies, was softer than the same newspaper’s assessment that Iran helped to plot the attack over several weeks. The New York Times similarly reported that early intelligence, not just in the U.S. but from Israel and other regional allies, showed the attack surprised Iranian leaders.
So far, the fighting on Israel’s other borders has been limited, though Egyptian officials have said Hezbollah would join the fighting in the north if Israel launched a ground invasion of Gaza. The formation of a unity government in Israel suggests such an invasion is likely, according to reports.
Read: Israel-Gaza war scenarios: what might lift oil prices to $95, $100, and $115 a barrel
Besides the Middle East, the American Petroleum Institute late Wednesday reported a 12.9 million barrel increase in U.S. crude supplies in the latest week, according to a source citing the data.
The Paris-based International Energy Agency on Thursday said that it now expects oil demand to grow by 2.3 million barrels a day this year, a hike of 100,000 barrels a day from last month’s report — translating into total demand averaging 101.9 million barrels a day, a new record.
At the same time, the agency cut its demand growth forecast for 2024, projecting total demand will average 102.7 million barrels a day. The IEA expects the strong economic rebound from Covid-19 lockdowns will start to wane, sapping demand next year.
