Oil Surges On Report Iran Is Planning Fresh Attack On Israel
Date
10/31/2024 7:02:30 PM
(MENAFN- Live Mint) 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.
“This like a balloon that gets inflated and deflated - we are now blowing a little air back into the geopolitcal risk premium,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Group.
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.
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