Crude and refined product futures experienced a significant increase by midday Thursday, as the entire petroleum complex continues on an upward trend for the fourth consecutive session. The surge comes after Israeli Prime Minister Benjamin Netanyahu's rejection of a ceasefire offer.
One of the factors contributing to the rise is the follow-through buying from energy investors. The latest Energy Information Administration data, which revealed a substantial decrease in gasoline and distillate stocks, has improved the overall buying sentiment in the market.
As of 12:10 p.m. ET, March NYMEX West Texas Intermediate crude futures showed a $2 advance at $75.85 per barrel. Similarly, April WTI rose by $1.95 to $75.85/bbl. ICE Brent crude, based in London, also witnessed a surge, with April delivery increasing by $2.05 to reach $81.25/bbl, and May Brent crude rising by $1.95 to $80.85/bbl.
In refined product futures, there was considerable growth as well. March NYMEX RBOB gained 5.60 cents to $2.3215 per gallon, while April RBOB rose by 5.70 cents to $2.5395/gal. March ULSD prices climbed 5.15 cents to $2.8670/gal, and April ULSD increased by 5.30 cents to $2.7955/gal.
The decision made by Netanyahu on Wednesday to reject Hamas's ceasefire offer and persist with the conflict in the Gaza Strip indicates that violence in the Middle East is likely to continue. However, U.S. Secretary of State Antony Blinken remains hopeful, stating that there is still room for negotiation.
Furthermore, the energy futures market has also received a boost from economic optimism. A leading Federal Reserve policymaker suggested that the U.S. central bank should consider reducing interest rates due to signs of stable inflation.
The weekly EIA data released on Wednesday indicated a significant decrease in U.S. gasoline and distillate stocks, both declining by over 3 million barrels during the week ending Friday.