WTI prepares for a fresh upside
West Texas Intermediate (WTI), futures on NYMEX, gather strength for a fresh upside above the immediate resistance of $86.50. Investors see the oil market tightening further as conflict between Israel and Hamas could stretch beyond Gaza. The market mood is relatively cautious but investors still have not gone for an intense sell-off as they are watching how things would develop ahead. This is because Hamas got ready for discussions over a truce while the risk of participation by other players remains persistent. Western nations supported Israel amid the Gaza attack while Saudi Arabia has extended its hands to the Palestine military group.
In response to the strike from Palestine, troops from Israel did airstrikes on the Gaza Strip. Israel Prime Minister Benjamin Netanyahu said on Monday that Israel's response to the multi-pronged attack by Palestinian gunmen from the Gaza Strip will change the Middle East. The oil supply from the already tight oil market is expected to elevate inflationary pressures in countries, which rely on oil imports to cater to their energy requirements. The US Dollar Index (DXY) dropped further below 106.00 as a couple of Federal Reserve (Fed) policymakers supported keeping interest rates unchanged on November 01 due to the rising US Treasury yields. The 10-year US Treasury yields have humped to a multi-year high at around 4.8% and have elevated borrowing costs. Meanwhile, investors await the United States inflation data, which will be published on Thursday. A slowdown in the progress of inflation declining to 2% could raise bets for one more interest rate increase from the Fed by the year-end.