The recent attack by Hamas on Israel has had a significant impact on the oil market. Initially, there was fear and uncertainty surrounding the situation, causing oil prices to skyrocket. However, the market has since priced out this fear, indicating that there may not be a spill-over effect into OPEC member Iran.
Crude futures saw a slight increase to $83.57 per barrel in early electronic trade on Thursday, up from nearly $87 on Monday.
Recent reports suggest that Iran was aware of Hamas’ plans for an attack but did not have specific information regarding the timing or scope of it. This information, provided by U.S. intelligence agencies and cited by the Wall Street Journal, contrasts with their earlier assessment that Iran played a role in plotting the attack over a period of several weeks. The New York Times also reported that early intelligence from Israel and other regional allies indicated that Iranian leaders were caught off guard by the attack.
Thus far, the fighting on Israel’s other borders has been relatively contained. However, Egyptian officials have stated that Hezbollah would join the conflict in the north if Israel were to launch a ground invasion of Gaza. Reports suggest that the formation of a unity government in Israel increases the likelihood of such an invasion.
In addition to the situation in the Middle East, the American Petroleum Institute has reported a significant increase of 12.9 million barrels in crude supplies for the latest week. The Energy Department’s report, scheduled for release at 11 a.m. Eastern on Thursday, is expected to show a further rise in supplies.