Oil tumbles 3% as world powers work on diplomacy for Gaza
Investing.com — The “no free lunch” 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.
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.
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.
“Any prospect of de-escalation in Gaza and Israel will help to cool the moves we've seen in recent weeks,” 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.
New York-traded West Texas Intermediate, or WTI, crude for December delivery, settled at $85.49, down $2.59, or 2.94%. WTI rose 2% last week, adding to the prior week’s gain of around 6%.
UK-origin Brent crude for December delivery settled down $2.33, or 2.5%, at $89.83 per barrel. Last week, the global crude benchmark rose 1.4%, adding to the prior week’s gain of 7.5%.
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.
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
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