Hamas attack on Israel sends oil prices higher, but market hopes for quick resolution of conflict

Oil prices rose sharply after the attack by Hamas militants on Israel, but they fell in late trading on Monday after the Israeli army liberated the occupied territories. Israel is carrying out heavy shelling of the Gaza Strip, and has already warned Iran and Syria of a similar response if they start a war in the north of the country.

However, the conflict could widen and disrupt crude oil supplies from the Middle East, as more and more information is emerging that it was Iran's special services that helped Hamas plan and carry out Saturday's attack. The US has already sent its aircraft carrier group to the region.

On Monday, December Brent oil futures on the ICE Futures exchange rose by 4.1% to $88.1/barrel (-3.2% for the week), and November WTI oil futures rose by 4.3 % to $86.4/barrel (-3% for the week) against the background of a possible disruption of supplies from Iran of about 2 million barrels of oil per day due to the strengthening of sanctions. Gold also rose by 1.1% to $1,852/oz.

According to Vortexa's weekly report, from September 30 to October 6, the volume of crude oil on tankers parked for at least a week worldwide decreased by 15% to a 10-month level of 70.04 million barrels.

The modest rise in oil prices suggests that the market is hoping for a quick resolution to the conflict between Israel and the Gaza Strip and non-interference by Lebanon, which borders Israel to the north.

Following oil prices, December palm oil futures on Bursa Malaysia rose 2.4% on Monday, but settled up just 0.22% at 3,608 ringgit/t, or $463/t, after falling at 4.4% last week.

Today, a report on stocks in Malaysia will be released, which may reach the highest level since October 2022, despite the increase in exports against the background of increasing production.

India cut its palm oil imports by 26% in September compared to August, as the country's stocks reached record levels.

Seasonal increases in sunflower and soybean oil supplies from Northern Hemisphere countries will add pressure on vegetable oil prices in the near term, so palm oil quotes will remain low.