Key facts
- Oil traders anticipate potential escalation in the Middle East post-US midterm elections.
- ING strategists predict oil prices will fall if hostilities do not resume.
- Erosion of market risk premium is expected if no new strikes occur after elections.
- Diesel prices declined due to reports of Russian diesel shipments to the U.S.
- The ICE gasoil crack spread is at its lowest since early October.
Oil traders are anticipating a potential escalation in the Middle East following the U.S. midterm elections on November 3, according to ING commodity strategists. If new hostilities do not occur, analysts predict oil prices will likely fall as the market's risk premium erodes. Reports of Iranian strikes on tankers have reached an all-time high this month, indicating the Persian Gulf situation is not normalized. Meanwhile, diesel prices have decreased following reports of Russian diesel shipments destined for the United States, bringing the ICE gasoil crack spread to its lowest level since early October.