Oil Prices Mixed Amid Efforts To Contain Israel/Hamas Conflict

Meanwhile, talks resume between Venezuela and the U.S.: File Image/Pixabay

Oil traders on Tuesday exhibited limited confidence in Washington's diplomatic efforts to contain the Israel/Hamas conflict and disappointment over suggestions that bank rates could rise yet again within a few weeks.

As a result, Brent settled up 25 cents at $89.90 per barrel while West Texas Intermediate remained unchanged at $86.66.

The trading was partly informed by Thomas Barkin, chief of the Richmond Federal Reserve Bank, who stated that higher long-term U.S. borrowing costs are putting downward pressure on demand but it was unclear if this would affect the decision whether or not to raise rates again in three weeks.

He said, "Longer-term rates have moved up, that's certainly tightened financial conditions...the challenge with depending on (long-term) rates is they can move."

Also, all eyes were on U.S. president Joe Biden as he prepared to visit Israel on Wednesday, as its offensive against Hamas escalates and Iran threatened "preemptive action" from the "resistance front" of its allies, which include Hezbollah in Lebanon.

Louise Dickson, an analyst at Rystad Energy, told Bloomberg, "De-escalation is the theme of this week, and that is coming from all different political sides, whether that's Washington, Jerusalem or Tehran….Iran is the linchpin: everything depends on what Iran does."

In other oil related news on Tuesday, Venezuela's government and opposition resumed talks that as of press time were expected to result in the signing a deal with the U.S. to democratize Venezuela's 2024 election and could lead to Washington easing sanctions that have been in place since 2019.

However, even if improving relations between the two countries were achieved, any substantial oil output increase from Venezuela would take time due to lack of recent investments.

Also, Saudi Arabia's Aramco said it could ramp up oil production within weeks if needed in order to combat any shortages due to geopolitical tension and to match record global consumption.

Finally on Tuesday, tanker tracker data showed that Russia's seaborne crude oil exports rose in the seven days to October 15, with the former Soviet Union's's four-week average seaborne crude exports now at a three-month high.

Russia's crude exports now are at 3.51 million barrels per day (bpd), an increase of .285 million bpd from the seven days to October 8, which led media to wonder whether the pact between Saudi Arabia and Russia to keep oil barrels off the market is weakening.