- WTI is trading lower, around $87.75, extending losses from Friday
- The Cal ’24 strip is down 47c to $80.60, and the Cal ’25 strip is lower by 20c to $74.82
- Israel holds off on Gaza invasion as market participants assess geopolitical conflict (BBG)
- Crude prices have advanced about 8% since the October 7 attack in Israel, with concerns mounting that Lebanon, Iran, or the US could be dragged into the conflict
- The ground invasion has been delayed in an attempt to secure the release of more hostages
- Speculators have increased their net long position in Brent crude by the most since 2016 last week and the number of call options traded hit a new record
- RBC wrote in a report that “There is significant asymmetric upside to near-term oil prices in the event that the Israel-Hamas war escalates into a wider-spread regional conflict”
- Goldman Sachs says US supply growth to slow in 2024 (BBG)
- The bank said in a note that while the US remains the world's marginal oil supplier, well productivity is not increasing in the Permian
- Goldman forecasts that US liquids growth will slow to 600 MBbl/d in 2024, from 1.4 MMBbl/d in 2023
- While OPEC countries have about 4 MBbl/d of spare capacity, physical or political barriers to deploying this capacity is an upside risk