Futures Movers: Oil hovers around $90 a barrel as investors monitor Israel-Hamas war

Posted By: EN Todayon: October 16, 2023In:

Oil futures were little changed early Monday, with global benchmark Brent crude hovering above $90 a barrel, as investors monitored the Israel-Hamas war amid fears the conflict could escalate, threatening supplies.

Price action

West Texas Intermediate crude for November delivery
CL00,
+0.58%

CL.1,
+0.58%

CLX23,
+0.58%
was up 2 cents, or less than 0.1%, at $87.71 a barrel on the New York Mercantile Exchange.
December Brent crude
BRN00,
+0.44%

BRNZ23,
+0.44%,
the global benchmark, was off 19 cents, or 0.2%, at $90.71 a barrel on ICE Futures Europe.

Market drivers

Oil rose sharply on Friday, with traders appearing reluctant to hold short positions ahead of the weekend as Israel prepared for an expected ground incursion into Gaza. Fears the Israel-Hamas war could spill over, perhaps involving Iran and threatening supplies from the Mideast saw traders rebuild a risk premium after an initial spike last Monday was mostly erased in subsequent sessions.

See: Oil prices in spotlight as Iran warns of escalation of Israel-Hamas war

The bounce, however, didn’t see crude challenge the 2023 highs set in late September.

“Aside from the influence of geopolitics, however, oil market fundamentals were mixed as U.S production surged to a new record high (bearish), but consumer demand rebounded as well and economic data continued to indicate a resilient labor market, both of which support the case for higher prices,” analysts at Sevens Report Research wrote in a Monday note.

“Looking ahead, as long as the war between Israel and Hamas continues, there will be a geopolitical fear bid in the market as oil infrastructure in the region will face an elevated threat of being targeted,” they said.

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