Oil prices fell on Thursday morning as the dollar extended its rally. Still, the commodity held onto half of its surge from the previous day as the Israel-Hamas war continued.
Global benchmark Brent slipped below $90 after surging 2.3% on Wednesday. This comes after Energy Information Administration data revealed that US stockpiles rose by 1.37 million barrels last week, with those at the Cushing, Oklahoma, storage hub alone growing by 213,000 barrels.
Investors’ fears have been building with anticipation of an Israeli ground offensive in Gaza in retaliation for the October 7 terrorist attacks. Still, experts feel that an oil rally built on concerns about the Mideast conflict will not last. “Any rally built on geopolitical risk premium is built on sand,” Keshav Lohiya, founder of consultant Oilytics explained. “The macro headwinds continue to get worse and are putting increasing pressure on oil markets.”