WTI crude oil daily
It’s not clear how much political risk is currently priced into the oil market but we may soon find out.
CNN reports that Hamas is considering a new framework proposed by Egypt that
calls for the group to release as many as 33 hostages kidnapped from
Israel in exchange for a pause in hostilities in Gaza. A slow release over several weeks and the release of Palestinian prisoners could lead to a durable calm in the area.
Hamas is also joining talks in Cairo, in a hopeful sign.
The news has prompted some selling in oil today with WTI down $1.26 to $82.59, which is the lowest since Thursday.
Some estimate as much as an $8 premium in oil prices due to geopolitics but I think it’s much lower, particularly after the Iran-Israel fighting last week fizzled. However there’s no real way of knowing until/unless we get a ceasefire deal.