Trump said US aid to Israel would be cut off at year-end. Oil fell $2.42 to $94.05 as reports surfaced that Washington approved a draft MOU.
Trump appeared on Fox News, where the topic turned to Israel. The remarks look to be one factor putting pressure on oil, given a sense that some dividing lines are forming between Washington and Jerusalem. The market is pushing that interpretation further, into the idea that the US could reach a deal with Iran. I am doubtful that is what Trump really means, but oil's price action this week has been dramatic.
WTI's most recent reading put it $2.42 lower, at $94.05.
My own sense is that heavy manipulation has marked the oil market this year, and insider trading has been rampant. At the same time, I figure just about everyone in the market would rather stop chasing headlines about an Iran war.
The Israel headlines were accompanied by reports that the draft MOU has been cleared by Washington, citing Al-Jadeed as the source once more. That outlet is not credible in my view, but it was the same driver as yesterday's selloff. The reporting has it that discussions now revolve around initial steps toward an interim agreement, with both sides giving ground on nuclear issues and frozen funds.
This will be closely watched in the hours ahead, though reporting from a more reliable source would be welcome.
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