Uncertainty spikes in oil markets as Israel goes to war with Hamas, OilPrice said.

Oil prices have been buoyed by the Hamas attack on Israel, with a heightened geopolitical risk premium in markets and growing concerns that the U.S. will double efforts to stem Iranian oil flows. Despite the price rise, uncertainty remains in oil markets as to exactly how supply and demand will be influenced. The double whammy of peak driving season being over and high crude prices have brought US gasoline demand much lower than it seasonally should be, shedding some 1 million b/d in demand since the July peak.

Supplies of finished gasoline in the US market fell to 8 million b/d in the latest weekly EIA numbers, which combined with soaring gasoline stocks (up 6.5 million barrels last week, the highest week-on-week jump in 20 months) adds to the pressure on light distillates. NYMEX RBOB gasoline futures have lost more than 15% in the past month alone, currently trading at $2.24 per US gallon, well below last year’s October readings.

Peaking at $30-35 per barrel in the summer, gasoline cracks are down to $5-6 per barrel across all continents – in Europe they’re the lowest as gasoline inventories in the ARA region (Amsterdam-Rotterdam-Antwerp) surged to the highest level since 2008. The rapid escalation of the military conflict between Israel and Palestine’s Hamas allowed oil prices to regain some of the lost ground from last week, with ICE Brent adding almost $4 per barrel Monday and closing at $88 per barrel. The focus is on Iran now, with ramifications of the Gaza standoff potentially impacting the country’s oil exports if the US political establishment enforces stricter enforcement of sanctions.

OPEC raises oil demand outlook.In its recently published 2023 World Oil Outlook, OPEC defied IEA calls to abandon fossil fuels and raised its world demand forecast, expecting peak demand by 2045 at 116 million b/d, which is a whopping 6 million b/d increase compared to last year’s report.

Exxon-Pioneer deal hard to derail. The White House would struggle to thwart ExxonMobil’smulled $60 billion takeover of Pioneerdespite its previous adverse disposition towards the US major, as it’s usually refinery or retail deals that trigger antitrust risks.

Russia lifts ban on diesel exports.Following Friday’s announcement that Russia would lift the ban on most diesel exports, the world’s top seaborne exporter of the fuel has resumed full-blown port operations, though the prohibition of gasoline exports remains in place.