Oil falls for 4th day on U.S. supply, geopolitical conflict

Crude oil (BZ=F, CL=F) prices fell for a fourth-straight day as diplomats mitigate the fallout from escalations in the war between Israel and Hamas. In addition, a weekly report from the U.S. Department of Energy showed a positive turn in domestic oil supply with 1.372 million barrels, beating Wall Street expectations. Yahoo Finance Reporter Jared Blikre joins the Live show to break down the latest numbers crude oil figures and how the energy sector is reacting.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

SEANA SMITH: Oil is in the red once again today, with crude selling off for the fourth day in a row. This comes as speculation that the Israel-Hamas war could potentially stay contained, with diplomatic efforts going on in the region. We also want to mention the decline that we got in the recent data coming out from the US government data revealing weekly gains in domestic crude, and also gasoline inventories there.

So prices further declining on the latest supply readings. Jared Blikre standing by with the latest on the movement that we're seeing within the oil market. Jared.

JARED BLIKRE: Hi, Seana. Let's go straight to the YFI interactive where I have crude oil up. And you can see we got a little bit of a dip.

This was on the government report that you were just talking about, where we saw a rise in crude oil inventories. This is a weekly report from the Department of Energy. 1.372 million barrels.

Now that was a surprise, because the street was expecting a draw. So a -450,000 barrel. When you get the sign wrong, sometimes you do see some movement there. But not a huge deal in the big picture of things.

Let me put a year-to-date chart. And you can see here, we got this spike to above $90 per barrel, about $95 in there. That was on the beginning of the most recent conflict. That kind of pales in comparison to what we saw last year, with Russia invading Ukraine. That did cause a lot more disruptions.

Nevertheless, market participants are already looking ahead to the next OPEC Plus meeting. That is going to be happening next week. And expectations are that they're going to hold. So Saudi Arabia and Russia have been holding supplies.

They've been actually holding back 1.3 million barrels per day. That's excess capacity that could theoretically come back at any time and help lower prices. But guess what? The Saudis and OPEC and OPEC Plus, that's their cash cow.

So they want to see crude oil at above $100, ideally $110. And when we're talking about that, it's really going to be brent because that's the pricing that we use. They're few dollars more.

And this is more of a European and Asian grade that Asian importers use. And we can see there, very similar chart. But nevertheless, a couple dollars higher there.

And just in general, I want to talk about the energy market. Year-to-date, energy is actually down. It's almost break even, but down ever so slightly. 0.4%. And you can see, this is a two-year chart.

Let me put that on a one year-to-date. You can see some vicissitudes in there. But over the last three months, we've really seen actually a little bit more. Let me put in a six-month chart in there. You can see a little bit more gains.

We had one area of trading that would have a trading range to the bottom. And then, we have this trading range that's-- we've seen since August. And in that time period-- let me just put a three-month show.

Energy is the only sector that has been in the green while the general market has rolled over. We saw the markets peak in late July, very end of the month. And then, August was down.

September was down. October is looking like it might be down as well in the general market. So we'll have to see what comes of this.

Finally, I just want to show you what's happening in the energy space. This is over the last three months. Let me just throw this into a year-to-date look.

You can see for the most part, more green than red. And also got to say that given all the pricing, and given all the declines that we've had in stocks in general since last year, and the fact that energy is finally rolling over a bit from those high prices that we saw last year, we're seeing mergers and acquisitions. The latest being Hess, for instance.

And that's where a lot of the outlier activity is coming from. We are looking forward to Exxon and Chevron earnings coming up. And so, we will be bringing those to you some fine morning when they report.

BRAD SMITH: All right. Yes, indeed. Jared, appreciate it. Thanks so much.