Oil prices look to post a 4th straight session decline, losing most of their war premium

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Oil prices on Wednesday looked likely to finish lower for a fourth consecutive session, giving up most of the Israel-Hamas war premium that had built up over the past two-and-a-half weeks.

Prices also declined after U.S. government data revealed weekly gains in domestic crude and gasoline inventories.

Price action

  • West Texas Intermediate crude for December delivery
    CL00,
    -0.47%

    CL.1,
    -0.47%

    declined by 62 cents, or 0.7%, to $83.12 a barrel on the New York Mercantile Exchange.

  • December Brent crude 
    BRNZ23,
    -0.10%
    ,
    the international benchmark, shed 24 cents, or 0.3%, to $87.83 a barrel on ICE Futures Europe. The losses for both Brent and WTI crude follow three consecutive session declines.

  • November gasoline
    RBX23,
    -0.72%

    fell 0.7% to $2.2508 a gallon on Nymex, while November heating oil
    HOX23,
    -1.40%

    was down 2% at $2.9848 a gallon.

  • November natural gas
    NGX23,
    +0.91%

    gained 0.8% to $2.995 per million British thermal units ahead of U.S. supply data due out Thursday.

Market Moves

Disappointing data on European economic activity helped weigh on oil prices Tuesday, as did the release of more Hamas hostages and the delay of the expected Israeli ground invasion of Gaza.

“The fears of a further escalation in hostilities between Israel and Hamas remain, but have lost some of their intensity,” said David Morrison, senior market analyst at Trade Nation, in emailed commentary.

WTI crude futures, the U.S. benchmark, had settled at $82.79 a barrel the day before the Hamas attack on Israel on Oct. 7, and peaked at a settlement high above $89 a barrel late last week, according to FactSet data. U.S. benchmark prices have given up most of their gains seen since the start of the war.

” The crux of the matter is that there has been no interruption in the Middle East’s oil supply.”


— Stephen Innes, SPI Asset Management

“The crux of the matter is that there has been no interruption in the Middle East’s oil supply,” said Stephen Innes, managing partner at SPI Asset Management in market commentary.

Supply data

On Wednesday, the U.S. Energy Information Administration reported weekly increases in domestic crude and gasoline supplies, but distillate stocks declines.

U.S. commercial crude inventories climbed by 1.4 million barrels for the week ended Oct. 20, the EIA said.

Macquarie forecast a climb of 1.1 million barrels. Late Tuesday, the American Petroleum Institute reported a 2.7 million-barrel weekly decline in U.S. crude supplies, according to sources citing the data.

The EIA report also revealed a supply increase of 200,000 barrels for gasoline, while distillate stockpiles declined by 1.7 million barrels. Macquarie forecast inventory decreases of 1.3 million barrels for gasoline and 3.3 million barrels for distillates.

Crude stocks at the Cushing, Okla., Nymex delivery hub rose by 200,000 barrels for the week, the EIA said, while domestic petroleum production remained at 13.2 million barrels per day.



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