Oil futures: Crude resumes rally ahead of Israel security vote

Quantum Commodity Intelligence – Crude oil futures on Thursday were sharply higher, as markets remained on edge over Israel's anticipated military strike against Iran, with Jerusalem set to vote on its next course of action.

Front-month Dec24 ICE Brent futures were trading at $79.25/b (1645 GMT), compared to Wednesday's settle of $76.58/b and up from an intraday low.

At the same time Nov24 NYMEX WTI was trading at $75.76/b, versus Wednesday's close of $73.24/b.

Benchmarks are now around $2/b from early-week highs as the US and its allies continue to discourage Israel from targeting Iran's oil facilities.

However, there is a growing concern that Israel will pursue its own agenda, which could include targeting energy and Tehran's nuclear industry, sparking fears of a broader conflict and potential disruptions to regional oil supplies.

Joe Biden and Benjamin Netanyahu held a first call since August on Wednesday, which included discussions on a potential Israeli attack against Iran, but the White House would only describe talks as "direct" and "productive."

CNN reported that Israel's security cabinet is set to vote for a response to last week's Iranian missile attack on Thursday, prompting speculation that an Israeli return strike against Iran could be imminent. 

Hurricane

Elsewhere, investors were keeping an eye on Hurricane Milton as it made landfall in Florida, but oil disruptions are expected to be localised.

Only one US platform was reportedly shut down as the massive storm crossed the Gulf, although oil disruptions were also reported on the Mexican side.

This week's EIA report initially wobbled markets after data revealed an unexpectedly large 5.8 million barrel build in crude stockpiles, which followed the 10.9 million barrel surge reported by the API.

But the crude build was mitigated as US gasoline stocks recorded the largest drawdown of 2024 last week, while demand soared past 9.6 million bpd.

Gasoline inventories fell 6.3 million barrels or 2.8% to 214.9 million barrels in the seven days to 4 October.