Oil erases gains

Oil prices fell for the third consecutive day on Monday, erasing all gains seen during the Israel-Hamas conflict at one point, as fears of the conflict spreading eased and U.S. industry data pointed to an increase in stockpiles.

U.S. crude oil fell below $83 per barrel after dropping on Wednesday.

The administration of U.S. President Joe Biden is considering re-freezing $6 billion in Iranian oil funds as part of its response to the crisis. Israel has vowed to destroy Hamas and has signaled a major ground offensive into Gaza that could destabilize the Middle East, which is home to about a third of the world's crude oil supply.

Vishnu Varathan, head of Asia economics and strategy at Mizuho Bank, said that the risk of a geopolitical flare-up in oil remains latent, and that assurances that the war will not affect oil supply are contingent on the conflict not spreading.

The initial gains for crude oil this week were erased on Tuesday after OPEC+ leader Saudi Arabia reiterated its support for the group's efforts to balance global oil markets. Along with record-level American production, the possibility of a deal between the U.S. and Venezuela also helped ease concerns about supply tightness that had helped support the strong rally in the previous quarter.

According to sources familiar with the data, U.S. inventory levels will be in the spotlight after the industry-funded American Petroleum Institute reported an increase of nearly 13 million barrels in nationwide stockpiles. However, inventories at the hub in Cushing, Oklahoma, have fallen to critically low levels. Official figures will be released later on Thursday.

News Source: 12punto