Oil rose today after two days of declines. December Brent gained about 1.5% to $115 a barrel, and WTI added roughly the same, trading near $101.
The main trigger was a Wall Street Journal report. The paper said the U.S. has asked several Persian Gulf countries to be ready for a short but intense campaign. According to the Journal's sources, Donald Trump has not made a final decision but is leaning toward a large-scale strike after the elections. Earlier market rumors said the White House had asked the Pentagon to prepare strike options ahead of the midterms. The timing has now shifted to the period after voting, but the logic remains the same. Trump has sent additional forces to the Gulf, including a third carrier strike group, and over the weekend said in an interview that "the time to decide" between a deal and a new attack is approaching.
A second factor is Israel. Two exit polls show the bloc of opposition leader Gadi Eizenkot neck-and-neck with Prime Minister Benjamin Netanyahu's bloc; a third poll gives Netanyahu a small lead. Neither side is likely to reach the 61 seats needed to govern alone, so lengthy coalition talks or even a repeat vote are possible. Until a government is formed, Netanyahu remains prime minister and could back Trump in a new campaign.
Physical risks also remain high. Yemen's Iran-aligned Houthis continue to attack Saudi energy infrastructure. Media reports said a fire broke out Tuesday morning near Saudi Arabia's largest oil terminal at Ras Tanura. The blaze was contained, but the extent of damage is unclear. Notably, similar strikes on Saudi targets occurred last week, when a drone hit the Shaybah field, and the U.S. ordered non-essential personnel out of the country.
Stocks push prices in the same direction. The American Petroleum Institute reported U.S. crude inventories fell by 2 million barrels last week — another weekly draw amid already-thin stocks. Official Department of Energy data are due today; the consensus calendar points to roughly a 300,000-barrel decline versus the prior -3.06 million figure. If the DOE confirms even a modest draw, it will reinforce the tightening narrative.
Attention will then turn to the Federal Reserve. The central bank is expected to hold rates steady, and high oil remains the primary argument for a hawkish tone, since rising energy prices feed inflation and constrain central banks' options. Higher energy is a boon for exporters but a burden for consumers — and ahead of the U.S. elections it risks denting Republicans' ratings.
I believe Brent will hold above $110 through November 3, and any fresh signal of a planned strike or another attack on Saudi facilities could easily push it back toward $120. I expect declines only if concrete diplomatic progress occurs; so far the market hears only talk of a "time to decide."
Technical picture: buyers need to take the nearest resistance at $102 to target $105, above which a breakout will be fairly difficult. The farther target is around $109. On a downside move, bears will try to seize control of $98; if they succeed, a range break would deal a serious blow to bulls and push Oil to a $95 low, with the prospect of extending to $92.
