Market News

(Bloomberg) -- Oil rose for a second day after US crude inventories shrank and fighting continued in the Middle East. 

West Texas Intermediate advanced about 1% to trade near $69.50 a barrel, while global benchmark Brent climbed above $73. US inventories of crude, gasoline and distillates — a category that includes diesel — all declined last week, according to data from the Energy Information Administration.

“Crude futures are continuing the relief rally, hunting the ‘chart gap’ area from Monday’s exaggerated selloff,” Dennis Kissler, senior vice president at BOK Financial Securities, said in a note. Traders are also largely unconvinced that cease-fire talks in the Middle East will bear fruit, he said. 

Fighting is still underway despite Israel signaling that it’s open to ending the conflict in Lebanon earlier this week. An airstrike on what Israel described as a local Hezbollah fuel depot on Wednesday set off a blast that killed at least 19 people, according to Lebanon’s health ministry said.

Top hedge fund manager Pierre Andurand has returned to the oil market with long positions in futures and options, according to a letter to investors seen by Bloomberg. He expects higher oil prices as a result of the ongoing conflict in the Middle East, the letter said. 

WTI’s prompt spread — the difference between its two nearest contracts — has widened to 46 cents in backwardation, which signals tighter supply-demand balances in the short term. But several major events — including next week’s US elections and a looming OPEC+ decision on output plans for December — are keeping traders on edge about the market’s direction.