Summary:
Oil prices dropped on Thu after a 2% gain. Iran seeks oil embargo on Israel, and US crude stocks fell exceeding forecasts.
Oil prices fell on Thursday after climbing about 2% in the previous session. Iran called for an oil embargo on Israel and the US crude stocks fell more than expected.
However, the OPEC is not planning to respond to the Iran’s request, sources told Reuters, easing concerns over supply disruption. There is a risk of Iran, Syria and Lebanon directly being involved in the conflict in Gaza.
US crude inventories fell by 4.5 million barrels during the week ended 13 Oct, the forth storage decline in five weeks, while gasoline fell by 2.4 million barrels, according to data from the EIA.
It far exceeded the 1.7 million barrel weekly draw a year earlier and compares with a five-year average build of 2.5 million barrels. The Biden administration is seeking ways to boost global flows of oil to curb high prices.
The White House eased sanctions on Venezuela's energy sector. A new general license has been issued to authorise Venezuela to produce and export oil to its chosen markets for the next 6 months.
Even so any impact of Venezuela’s increasing output on oil prices is expected to be only temporary as its oil sector has been underinvested for too long and the US is prepared to abort the deal at any time if Maduro fails to hold to the commitment.
Brent Crude is back to 90 following another futile attempt to beat the 92 level. Now it needs to hold above the 50 EMA to keep the bullish trend intact.
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