The market has priced out all the fear put into oil’s price after the surprise Hamas attack on Israel, which could be a bet that the fighting will not spill over to OPEC member Iran.
In early electronic trade on Thursday, crude
futures inched up to $83.57 per barrel, having risen to nearly $87 on Monday.
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.
Besides the Middle East, the American Petroleum Institute reported a 12.9 million barrel increase in crude supplies in the latest week. The Energy Department is expected to report a rise on Thursday, in a report due at 11 a.m. Eastern.