- Oil trades above $90/Bbl as escalating Middle East tensions add to an already tight market
- Nov ‘23 WTI gained $1.11 this morning to trade around $90.48/Bbl
- Yesterday, the Pentagon reported increased drone attacks in Iraq and Syria, while an American destroyer intercepted missiles from Yemen's Houthi rebels targeting Israel (Bloomberg)
- Additionally, Israel's military struck Hamas targets in Gaza and Hezbollah positions in Lebanon, and a ground invasion of Gaza seems imminent after positioning troops at the border
- Concerns are rising that the conflict may spread to countries like Iran and possibly involve the US, which has increased its local military presence
- Furthermore, Fed Chair Powell acknowledged signs of cooling inflation yesterday but said the Fed remains committed to its 2% mandate and hasn't ruled out a December interest rate hike
- Yields on the benchmark 10-year Treasury rose briefly to 5%, a level not seen since 2007, and equities traded lower
- U.S. plans to buy 6 MMBbl of oil for SPR at $79 (Bloomberg)
- The U.S. DOE announced plans to buy 6 MMBbl of sour crude for the strategic petroleum reserve delivery in December and January at $79 or less
- In response to the Russia-Ukraine war and rising gasoline prices, the Biden administration drew the SPR by 180 MMBbl to a 40-year low of 351 MMBbl from its 714 MMBbl capacity
- Additionally, the DOE confirmed a prior purchase of 4.8 MMBbl at an average price under $73/Bbl and said it will continue monthly solicitations for available capacity through May 2024