Brent futures for December rose 1%, or 88 cents, to $92.38 a barrel, while the U.S. West Texas average (WTI) futures for November, expiring Friday, rose $1.05, or 1.2%, to $89.37 a barrel. At their session lows, both benchmarks fell by more than $1 per barrel.
Israeli Defense Minister Yoav Gallant told troops gathered at the Gaza border that they would soon see the Palestinian enclave “from the inside,” hinting that an expected ground invasion aimed at destroying Hamas could be near.
Egyptian aid trucks moved closer to the only border crossing into Gaza not controlled by Israel, but had still not passed, despite a request from US President Joe Biden to allow the aid.
“We are still very much in flux and the potential for escalation, especially from the Arab world, is a problem,” said John Kilduff, partner at Again Capital LLC in New York.
U.S. forces in Syria shot down two drones aimed at them, causing some minor injuries, U.S. officials said.
Prices were supported later in the session by the Federal Reserve presidency Jerome Powell said the U.S. central bank would “proceed with caution” on future rate hikes, which could slow the economy and hit demand.
Fed funds futures traders estimate a 39% probability that the Fed will raise rates again by December, but only a 6% chance of a rate hike in November, according to CME Group’s FedWatch Tool.
Gains were limited after the US issued a six-month license allowing transactions in the energy sector of OPEC member Venezuela, whose government reached a deal with the political opposition there to guarantee fair elections in 2024.
The deal is not expected to lead to a rapid expansion of Venezuela’s oil production, but could bring some foreign companies back to its oil fields and bring more cash-paying customers for its crude, experts said.
The easing of US oil sanctions on Venezuela is unlikely to require any policy changes by the OPEC+ producer group for now, as a recovery in production is likely to be gradual, OPEC+ sources told Reuters.
On Wednesday, oil prices rose about 2% on concerns about disruptions to global supplies after OPEC member Iran called for an oil embargo on Israel over the Gaza conflict and after the US, the world’s biggest oil consumer, posted a bigger-than-expected oil consumption reported. inventory, adding to already tight supplies.
The Organization of the Petroleum Exporting Countries (OPEC) does not plan to take immediate action on Iran’s call, sources told Reuters.
Saudi Arabia had said it would maintain its voluntary production cuts until the end of the year. Japan, the world’s fourth-largest crude buyer, urged the Saudis and other oil-producing countries to boost supplies to stabilize the global oil market, which could be thrown into turmoil by the conflict.
U.S. crude oil and fuel inventories fell last week due to rising demand for diesel and heating oil, according to data from the Energy Information Administration (EIA). Distillate fuel inventories fell by 3.2 million barrels to 113.8 million barrels in the week to October 13, EIA data showed.
Crude oil inventories fell by 4.5 million barrels to 419.7 million barrels, while gasoline inventories fell by 2.4 million barrels to 223.3 million barrels.