Oil climbs amid persistent Middle East standoff

December West Texas Intermediate crude oil gained $2.71, reaching $99.84 per barrel, while Brent crude was quoted at $112.

The market remains fixated on the risk of further conflict before any peace breakthrough. Republicans are taking heavy criticism in the midterm elections over high gasoline prices and an unpopular war, while Iran is steadfast, seeking concessions before it will agree to anything.

Trump said yesterday that the United States is not in negotiations with Iran.

“No, I think we’re not negotiating,” he said. He later repeated a familiar line: “It’ll end very soon. We could leave now, but we want to make sure it lasts for a long time.”

Finally, he offered a dark remark: “We’re gonna have something one way or the other that’ll happen fairly soon. Most people seem to think it’s after the election, and we’re going to see what happens,” he added.

That could imply Iran will make concessions after Republicans lose at the polls for starting the war. That is the hopeful view, but a more likely outcome is that the US will increase attacks after the election and try to break Iran. Along those lines, a report yesterday said that new plans were being drafted.

Netanyahu also pushed for escalation and regime change. He said he discussed the need to topple Iran's regime with President Trump on Sunday. Of course, that must be seen through the prism of the October 27 elections, where betting odds give him just a 28% chance of remaining prime minister.

Overall, the recent flow of headlines points to more escalation rather than the brief peace hopes from earlier this week. Additionally, the conflict between the Houthis and Saudi Arabia is clearly adding upward pressure on oil. Houthi strikes have been surprisingly effective, and Saudi Arabia's airports are closed. Three people were also reported killed yesterday in an attack on an oil field.