Oil closed at the lowest in more than a week amid signs the crude market’s tightness has slackened and the Israel-Hamas war will remain contained for the time being.
“Crude is battling the trifecta of headwinds today,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth.
“Geopolitical risks are easing modestly, physical indicators are softening and the US dollar is rising. Much of the recent length in the market has been driven by retail buying, which tends to be short-term, event-driven traders.”
Crude -2.688mm (+10k exp)
Gasoline -4.169mm (-300k exp) – biggest draw since March
Distillates -2.313mm (-1.1mm exp)
A surprise build at the Cushing hub was offset by draws for crude and products with gasoline stocks tumbling most since March….
WTI was hovering just above $83.50 ahead of the print and popped modestly after…
The lack of any immediate supply disruptions in the Middle East, the source of about of a third of the world’s crude, has eroded most of the war’s risk premium. WTI is only 1.1% higher than before the Oct. 7 attack. Still, the possibility remains of Washington ramping up compliance checks on sanctioned Iranian oil and Tehran disrupting key shipping routes.