Oil Swings as Traders Weigh Middle East Risks, China's Outlook | Financial Post

Oil fluctuated after four sessions of declines as traders weighed potential risks to production in the Middle East, while another economic briefing in China left investors underwhelmed.

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(Bloomberg) — Oil fluctuated after four sessions of declines as traders weighed potential risks to production in the Middle East, while another economic briefing in China left investors underwhelmed.

West Texas Intermediate swung between gains and losses near $71 a barrel, while Brent traded around $74 a barrel. After advancing in early trading, oil pared gains after China’s announced stimulus for the housing market fell short of expectations.

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Both benchmarks have slumped this week on reports that Israel would avoid striking Iran’s crude facilities in retaliation for an Oct. 1 attack. On Thursday, the Israel Defense Forces said it’s “checking the possibility” that Hamas leader Yahya Sinwar was one of three people killed in operations at a location it didn’t specify. Meanwhile, US stealth bombers hit weapons storage sites linked to Iran-backed Houthi rebels in Yemen, and Israel stepped up air strikes on Lebanon.

“Focus remains on the Middle East and the timing and content of the long-announced retaliation attack from Israel,” said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management. “This morning, further details were released about the Chinese fiscal easing measures. The market was disappointed with the content.”

Oil prices have been buffeted this month as concerns over the conflict in the Middle East, which supplies about a third of the world’s crude, were undercut by increasingly bearish fundamental signals. Rising production from outside OPEC and sluggish demand growth will lead to a “sizable surplus” next year, barring any major disruption to flows, the International Energy Agency said this week.

In the US, an industry group reported that American crude stockpiles fell 1.6 million barrels last week. That would be the first decline in three weeks if confirmed by official data later Thursday.

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