Oil prices rise as traders await Israel response to Iran attack

By William Watts

Ample OPEC+ spare capacity preventing 'runaway' prices: Rystad Energy

Oil futures rose Thursday, finding continued support as traders awaited Israel's response to a missile barrage earlier this week by Iran amid concerns of a wider Middle East conflict that could disrupt flows of crude from the region.

Price moves

-- West Texas Intermediate crude CL00 for November delivery CL.1 CLX24 rose $1.30, or 1.9%, to $71.40 a barrel on the New York Mercantile Exchange.

-- December Brent crude BRN00 BRNZ24, the global benchmark, was up $1.26, or 1.7%, at $75.16 a barrel on ICE Futures Europe.

Market drivers

Crude prices have seen a sharp rise this week, rallying more than 4%, as investors turned their attention to the Middle East.

Still, traders and analysts see the response in price as relatively restrained. Both WTI and Brent remain negative on the year and, based on most actively traded contracts, are down sharply from where they were a year ago.

"The potential for supply disruptions - particularly, but not exclusively from Iran - increases as the fighting intensifies," said Claudio Galimberti, chief economist at Rystad Energy, in a note.

"But OPEC+ still sits on unusually ample spare capacity, which is the result of successive production cuts over the past two years," he wrote. "This spare capacity is for now preventing runaway prices amid one of the deepest and most pervasive crises in the Middle East in the past four decades."

Commodities Corner: Oil shock? How OPEC+ could soften the blow if the Middle East conflict hits supply.

-William Watts

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10-03-24 0649ET

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