U.S. crude oil rises more than 1% after Fed cuts rates, Israel-Hezbollah tensions escalate
by Spencer Kimball
click here to read this article at CNBC.com
*this article was not written by Roseland Oil & Gas
U.S. crude oil rose more than 1% on Thursday, one day after the Federal Reserve slashed interest rates for the first time in more than four years and as tensions in the Middle East continued to escalate.
The Fed surprised the market on Wednesday with a bigger-than-expected cut of a half percentage point. Oil prices, however, closed slightly lower as rate reductions had largely already been priced in.
The U.S. benchmark has now clawed back its losses this year, though it is still down more than 11% in the third quarter.
Phil Flynn, senior market analyst at the Price Futures Group, said the Fed cut appears to be “shaking out some hedge fund shorts from their bearish oil obsession.”
Here are Thursday’s closing energy prices:
- West Texas Intermediate October contract: $71.95 per barrel, up $1.04, or 1.47%. Year to date, U.S. crude oil is up less than 1%.
- Brent November contract: $74.88 per barrel, up $1.23, or 1.67%. Year to date, the global benchmark is down nearly 3%.
- RBOB Gasoline October contract: $2.06 per gallon, up 2.45%. Year to date, gasoline is down roughly 2%.
- Natural Gas October contract: $2.348 per thousand cubic feet, up 2.8%. Year to date, gas is down more than 6%.
Crude futures are on the rebound again as tensions soar between Israel and the Iranian-backed militia group Hezbollah in Lebanon. Prices are also finding support after U.S. oil stockpiles fell by 1.6 million barrels last week.
Israeli warplanes and artillery carried out strikes targeting Hezbollah in southern Lebanon on Thursday. The strikes come after pagers and walkie-talkies used by the militia exploded this week, killing dozens and wounding thousands across Lebanon. U.S. officials told NBC News that Israel was behind the pager attack. Israel has not taken responsibility for the attacks.
Israeli Defense Minister Yoav Gallant said Wednesday that his country’s focus is shifting from Gaza to the northern border with Lebanon, where some 60,000 Israelis have been evacuated, as a “new phase” of the war begins.
Oil market analysts have warned for months that an all-out war between Israel and Hezbollah, which until now have traded rocket fire, could force OPEC member Iran to directly intervene, raising the risk of disruptions to Middle East crude oil supplies.
“We continue to highlight Lebanon as the main pathway to oil disruption through direct Iranian involvement in a wider regional war,” Helima Croft, head of global commodity strategy at RBC Capital Markets, told clients in a Thursday note.
by Spencer Kimball
click here to read this article at CNBC.com
*this article was not written by Roseland Oil & Gas