Crude Prices Rise Slightly as Market Seeks Direction
Positive Start to Asian Session
Crude prices made a slight recovery in Wednesday’s Asian session, trading just above the previous day’s lower close. The market remains directionless after oil’s brief rally due to the recent Middle East crisis.
US and UK Crude Prices
US West Texas Intermediate (WTI) crude for November delivery increased by 0.3% to $86.20 per barrel. Meanwhile, UK-based Brent crude for the most-active December contract rose by 0.4% to $87.96. Both WTI and Brent saw a 4% increase on Monday due to concerns over the political and economic impact of the fighting between Hamas and Israel.
Temporary Pause in Crude Price Rise
However, global markets calmed down within 24 hours as stock markets on Wall Street rebounded. Crude prices fell as traders took a step back to assess the direct impact of the conflict. Uncertainty remains regarding the number of stranded barrels of oil in the Middle East and whether Iran had any involvement in the attacks on Israel.
US State Department’s Statement
The US State Department stated that Iran likely knew about Hamas’ planned operations against Israel, but the exact details were unknown. The Biden administration’s lack of focus on targeting Iran has been viewed as bearish for oil prices. Washington has been ignoring surging Iranian oil exports since late 2022, prioritizing an informal détente with Tehran to increase oil supply.
Fed Minutes and US Oil Stockpiles Data
Later in the day, the market will be keeping an eye on the Federal Reserve’s policy meeting minutes for September. If the minutes indicate a delay in rate hikes, it could potentially lead to an increase in oil prices. Additionally, US weekly oil inventory data will be released, providing insights into crude, gasoline, and distillate stockpiles. Analysts expect a decrease of 0.37 million barrels compared to the previous week’s reduction of 2.224 million barrels.
Overall, the market is still searching for direction amidst geopolitical tensions and economic uncertainties. The next few days will be crucial in determining the future trajectory of crude prices.
