{"id":75961,"date":"2023-10-23T18:25:42","date_gmt":"2023-10-23T22:25:42","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/commodities\/oil-tumbles-3-as-world-powers-work-on-diplomacy-for-gaza\/"},"modified":"2023-10-23T18:25:45","modified_gmt":"2023-10-23T22:25:45","slug":"oil-tumbles-3-as-world-powers-work-on-diplomacy-for-gaza","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=75961","title":{"rendered":"Oil tumbles 3% as world powers work on diplomacy for Gaza"},"content":{"rendered":"
\n

Investing.com – The \u201cno free lunch\u201d metaphor is becoming clearer for the long-oil community that had doubled down on the crisis in Gaza to send the market higher than probably warranted.\u00a0<\/p>\n

Crude prices tumbled some 3% Monday — with global benchmark Brent returning to below the key $90 per barrel mark — as diplomatic overtures for Gaza doused the bull sentiment that had sent the market up as much as 10% over the past two weeks.\u00a0<\/p>\n

US President Joe Biden visited Israel last week, and the leaders of France and the Netherlands will visit this week in search of a solution for the conflict.<\/p>\n

\u201cAny prospect of de-escalation in Gaza and Israel will help to cool the moves we’ve seen in recent weeks,\u201d Craig Erlam, analyst at online trading platform OANDA, said as Israel held off launching a ground assault on Gaza to provide time to negotiate the release of more hostages and create a window for diplomacy, even though it kept up with its aerial bombardment of the area.<\/p>\n

New York-traded , or WTI, crude for December delivery, settled at $85.49, down $2.59, or 2.94%.\u00a0 WTI rose 2% last week, adding to the prior week\u2019s gain of around 6%.<\/p>\n

UK-origin crude for December delivery settled down $2.33, or 2.5%, at $89.83 per barrel.\u00a0 Last week, the global crude benchmark rose 1.4%, adding to the prior week\u2019s gain of 7.5%.<\/p>\n

Speculators boosted their net long positions in Brent futures over the last reporting week, doubling down on their bets that the situation in Gaza will worsen.\u00a0<\/p>\n

Adding to sentiment was data such as that by Norway, which reported last week that crude production in the Scandinavian country fell to 1.64 million barrels per day in September, down from 1.79 million barrels in August and below forecasts of 1.73 million barrels.<\/p>\n

Wall Street vs global diplomacy<\/strong><\/h2>\n

Many on Wall Street seem to think crude prices should be higher due the relative proximity of the showdown in Gaza to some of the biggest oil producers, such as Saudi Arabia, the United Arab Emirates, Iraq and Kuwait.\u00a0<\/p>\n

While Israel barely registers in the global oil trade, the Strait of Hormuz straddling the current war zone is a key chokepoint for the movement of crude, where a fifth of all oil passes through the waters there.<\/p>\n

Also, the almost daily saber-rattling against Israel by avowed Hamas supporter and fifth largest oil producer Iran \u2014 and concerns of reprisals against Tehran by the Israelis and their main ally, the United States \u2014 has added to concerns that something untoward might happen soon.<\/p>\n

No demonstrable risk for oil trade yet from this war<\/strong><\/h2>\n

Yet, some oil traders see the conflict for what it is \u2014 a major political event that hasn\u2019t shown any demonstrable risk so far to the crude trade.<\/p>\n

The crux of it is oil is a\u00a0 commodity that attains its value from demand-related consumption. Unlike gold or the dollar, it\u2019s not a haven to keep benefiting from a mere figment of imagination that supplies are at a risk and, therefore, prices have to keep rising \u2014 when the reverse is the case.<\/p>\n

\u201cThere\u2019s no such thing as a free lunch, and that applies to oil bulls who have been riding this crisis in Gaza for free, despite its non-material impact thus far on the trade,\u201d said John Kilduff, partner at New York energy hedge fund Again Capital.<\/p>\n

A senior Israeli official told CNN earlier on Monday that there will be \u201cno ceasefire\u201d in Gaza amid US and Qatari efforts to free more than 200 hostages held by Hamas.\u00a0 The official said he was \u201cnot aware\u201d of US calls for a delay to Israel’s expected Gaza ground operation, although he concurred that both Israel and the US want all the hostages released \u201cas quickly as possible.\u201d<\/p>\n

\u201cHumanitarian efforts cannot be allowed to impact the mission to dismantle Hamas,\u201d added the official, whose identity was withheld by CNN.<\/p>\n

But as with any conflict with decision-making at multiple levels, the notion that peace was given a chance still persevered.<\/p>\n

\u201cPrice direction in the oil market continues to be dictated by developments in the Middle East,\u201d\u00a0 analysts at ING said, noting Monday\u2019s declines coincided with the \u201cground operation into Gaza appearing to have been delayed\u201d.<\/p>\n

Chevron <\/span><\/span> (NYSE:) to buy Hess (NYSE:) for $53 billion<\/strong><\/h2>\n

In corporate news on the energy front, Chevron, the second largest US oil and gas producer, announced Monday a plan to buy American rival Hess for $53 billion.<\/p>\n

This follows larger rival Exxon\u2019s deals since July for top U.S. shale producer Pioneer Natural Resources <\/span><\/span> (NYSE:) and Denbury, and reflects a desire for oil and gas assets in a world seeking lower-risk future fossil supplies and higher shareholder returns.<\/p>\n

Additionally, the International Energy Agency will release its World Energy Outlook on Tuesday, which will likely cover long term energy supply and demand trends.\u00a0<\/p>\n

(Peter Nurse and Ambar Warrick contributed to this item)<\/em><\/p>\n

\u00a0<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Investing.com – The \u201cno free lunch\u201d metaphor is becoming clearer for the long-oil community that had doubled down on the crisis in Gaza to send the market higher than probably warranted.\u00a0 Crude prices tumbled some 3% Monday — with global benchmark Brent returning to below the key $90 per barrel mark — as diplomatic overtures […]<\/p>\n","protected":false},"author":1,"featured_media":2233,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[242],"tags":[83],"class_list":["post-75961","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-commodities","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nOil tumbles 3% as world powers work on diplomacy for Gaza | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Investing.com - The \u201cno free lunch\u201d metaphor is becoming clearer for the long-oil community that had doubled down on the crisis in Gaza to send the market\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=75961\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Oil tumbles 3% as world powers work on diplomacy for Gaza | iFintechWorld\" \/>\n<meta property=\"og:description\" content=\"Investing.com - 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