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 Oil closed at the lowest in more than a week amid signs the crude market’s tightness has slackened and the Israel-Hamas war will remain contained for the time being.

API

• Crude -2.688mm (+10k exp)

• Cushing +513k

• Gasoline -4.169mm (-300k exp) – biggest draw since March

• Distillates -2.313mm (-1.1mm exp)

A surprise build at the Cushing hub was offset by draws for crude and products with gasoline stocks tumbling most since March….

Source: Bloomberg

WTI was hovering just above $83.50 ahead of the print and popped modestly after…

The lack of any immediate supply disruptions in the Middle East, the source of about of a third of the world’s crude, has eroded most of the war’s risk premium.

WTI is only 1.1% higher than before the Oct. 7 attack. ..

Still, the possibility remains of Washington ramping up compliance checks on sanctioned Iranian oil and Tehran disrupting key shipping routes.