Oil rises as Israel's invasion buildup reignites war premium

Oil rose as Israel’s preparations for a ground invasion of Gaza revived concerns about the conflict disrupting supplies from the Middle East.

Israeli Prime Minister Benjamin Netanyahu said during a televised speech that the country is in a battle for its existence, adding that he won’t explain the reasons for the timing of the planned ground assault. West Texas Intermediate rallied above US$85 a barrel during the speech, reigniting a war premium that had essentially vanished this week. 

Earlier, the Wall Street Journal reported that Israel was delaying its ground invasion as the U.S. readied air defenses to protect American troops in the Middle East. The report sent crude prices swinging, with the market trading in a range of about $3.50 on Wednesday.  

“Crude is trading from headline to headline as the market tries to price in the potential” of war ensnaring multiple countries in the Middle East, said Rebecca Babin, a senior energy trader at CIBC Private Wealth. “Living headline-to-headline keeps traders on the edge of their seats and likely to react quickly before understanding the full impactions of what is happening.”