DTN Oil Update
Oil Steady Amid Gaza Deal; Mixed US Inventory Report
VIENNA (DTN) -- Oil prices steadied Thursday, Oct. 9, morning after Hamas and Israel signed a ceasefire and hostage return deal, diminishing some of the geopolitical risk that had been providing support to crude markets.
Waning prospects for a Russia-Ukraine peace deal, however, lent fresh support to oil, as sanctions on Moscow and its energy trade seem likely to continue for the foreseeable future.
The counteracting factors led to range-bound action in crude prices, which rose after an initial dip on the Hamas-Israel development. Oil products, meanwhile, traded steadily higher, expanding this week's upward move.
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NYMEX-traded WTI crude for November delivery rose $0.05 to $6260 bbl, while ICE Brent for December delivery gained $0.04 to $66.29 bbl.
November RBOB gasoline futures edged higher by $0.0029 to $1.9124 gallon, and front-month ULSD futures rose $0.0058 to $2.2971 gallon.
The U.S. Dollar Index was up 0.075 points to 98.15 against a basket of foreign currencies.
The Gaza ceasefire deal could put an end to Houthi attacks on commercial shipping lanes connecting to the Suez Canal, which have led to rerouted trade, longer voyage times and higher costs.
The bulk of the geopolitical supply risk premium tied to this conflict, however, had already melted away after Iran and Israel halted reciprocal attacks following a twelve-day war in June.
On the demand end, a weekly inventory report from the U.S. Energy Information Administration published Wednesday portrayed a mixed picture about the domestic supply-demand balance.
EIA reported that gasoline and diesel stocks shrank last week, while commercial crude oil inventories continued to expand.
A draw to inventories at the Cushing, Oklahoma, tank farm hub, the delivery point for WTI futures, provided some support, but a large crude oil build at the U.S. Gulf Coast could be read as a sign of excess supplies.
EIA also reported a weekly jump in total products supplied to the highest weekly figure in close to three years.
On the four-week average, the proxy measure for fuel demand was up 1.7% year-on-year, despite figures for gasoline, distillate fuel oil and jet fuel supplied to the domestic market all trailing year-ago levels on the four-week average.