Oil prices are getting hammered after the Washington Post reported, “Israeli Prime Minister Benjamin Netanyahu has told the Biden administration he is willing to strike military rather than oil or nuclear facilities in Iran, according to two officials familiar with the matter, suggesting a more limited counterstrike aimed at preventing a full-scale war.” This change of course came from saying that it was a ‘historic opportunity’ to know a less limited strike on military targets. Biden on Sunday announced that he would send U.S. troops to Israel along with an advanced U.S. anti-missile system. Biden said the move was meant “to defend Israel,” but could be viewed as a move to stop Israel from attacking Iranian oil infrastructure which would cause a major price spike ahead of the election and probably put President Trump back in the White House.
The Washington Post wrote, “The retaliatory action would be calibrated to avoid the perception of “political interference in the U.S. elections,” the official familiar with the matter said, signaling Netanyahu’s understanding that the scope of the Israeli strike has the potential to reshape the presidential race.”
Yet why would Israeli Prime Minister Benjamin Netanyahu let this ‘historic opportunity’ to hit the Iranian regime hard, when Iran has a mission to wipe Israel off the earth and has funded groups that have been involved in carrying out and planning terror attacks on their citizens? Could it be that Israel has another way to take advantage of this historic opportunity? Is it possible that Isreal plans to do what they did to the leaders of Hezbollah and take out not only Iranian military sights but cut off the head on the snake by going after Supreme Leader Ali Khamenei and Iranian President Masoud Pezeshkian who at last report was in the “strongest bunker in the world”.
Instead of taking out the oil and nuke sights and because of the amazing tactics of the Israeli military, could they make the Iranian leadership legitimate targets? Normally that would be viewed as a bad idea, yet remember Iran thought that President Trump was a ‘legitimate target’. Democrat nominee Kamala Harris said that Iran is our biggest threat and has American blood on their hands. If I was the Supreme Leader of Iran or the President of Iran, I’d probably not leave the ‘world’s strongest bunker’. I wonder if they have enough room in there for other senior leaders of the regime.
This comes as the International Energy Agency (IEA) had to raise its forecast for global oil demand a day after OPEC had to lower its forecast for global oil demand. Reversion to the mean? Still, the IEA put it this way. The IEA said, ‘World oil demand is on track to expand by just shy of 900 kb/d in 2024 and close to 1 mb/d in 2025, marking a sharp slowdown on the roughly 2 mb/d seen over the 2022-2023 post-pandemic period. China underpins the deceleration in growth, accounting for around 20% of global gains both this year and next year, compared to almost 70% in 2023.
Reuters reported that China imported 45 million tonnes of oil in September down from 46 million tonnes in the same month a year earlier. Total imports in the first nine months slowed to 412 million tonnes from 425 million tonnes in the same period in 2023. Still, oil supply fell.
The IEA said global oil supply plunged by 640 kb/d in September to 102.8 mb/d, with Libya’s political quagmire disrupting the country’s oil production and exports, and as field maintenance work in Kazakhstan and Norway lowered output. Non-OPEC+ supply growth of around 1.5 mb/d this year and next is led by the Americas, accounting for 80% of gains.” The IEA said that oil prices spiked earlier this month with the market now focused on Israel’s next move, and questions over whether key Iranian energy infrastructure could be targeted. The country’s main Kharg Island export terminal which ships 1.6 mb/d of crude, primarily to China, is a major concern as is the potential spillover to the strategic Strait of Hormuz waterway. For now, oil exports from Iran and neighboring countries are unaffected but the market remains on tenterhooks, awaiting the next developments in the crisis. At the same time, Libyan crude shipments have resumed, following the hard-won agreement that resolved the political dispute that had disrupted oil exports. On the other hand, the above-normal US hurricane season still has six weeks to go. That’s why you must download the Fox Weather app.
The IEA tried to calm markets by saying, “As supply developments unfold, the IEA stands ready to act if necessary. As shown in 2022, the Agency and its member countries can quickly take collective action. IEA public stocks alone are over 1.2 billion barrels, with an additional half a billion barrels of stocks held under industry obligations. China holds a further 1.1 billion barrels of crude oil stocks, enough to cover 75 days of domestic refinery runs at current rates. For now, supply keeps flowing, and in the absence of major disruption, the market is faced with a sizeable surplus in the new year.
Fox Weather is watching another storm while the Midwest is seeing frost. Some forecasts suggest the possibility of a record-breaking cold front to start the month of November, but it’s too early to lock that in. The market now will focus on the Atlantic.
Fox Weather reports that Invest 94L continues a trek across the Atlantic while a new disturbance emerges in the Caribbean Sea. Fox Weather says that one area being watched closely is located over the central Atlantic Ocean and has been designated Invest 94L, while the second area of disturbed weather is centered over the western Caribbean Sea. Fox Weather says that forecasters with the National Hurricane Center (NHC) said Invest 94L remains over the central Atlantic Ocean and is a well-defined area of low pressure that has been producing precipitation and thunderstorms. The NHC said Invest 94L remains in a dry air environment, and development of the system over the next day or two remains unlikely. However, the system is expected to continue to move off to the west into an environment that will be more favorable for development, and a tropical depression could form as it approaches or moves near the Leeward Islands and into the Caribbean Sea. If you plan to travel to popular warm-weather destinations like Puerto Rico or the U.S. Virgin Islands, you’ll want to monitor the forecast.