Oil prices fell about $4 a barrel on Monday after Israel’s retaliatory strikes against Iran over the weekend left oil and nuclear facilities untouched, preventing disruption to energy supplies.
By 1445 GMT, brent futures Falling $4.13, or 5.43 percent, was at $71.92 a barrel, while US WTI crude futures were down $4.04, or 5.63 percent, at $67.74.
Both Brent and US WTI crude fell to their lowest levels since October 1.
Last week, the benchmarks had risen 4 per cent in a volatile market as uncertainty over the upcoming US election and Israel’s possible response to an Iranian missile attack on October 1 hit trade.
“Crude oil prices fell 6% on Monday to $67 per barrel for WTI and $71 per barrel for Brent. This return to the low level of the last two months was due to Israel’s attack on Iran’s oil capacity. After this, counter statements from the politicians of both the countries have given rise to speculations that both the sides are trying to avoid tension for the time being. As a result, the geopolitical risk premium has declined sharply. Alex Kuptsikevich, chief market analyst at FXPro, said prices have returned to levels seen before the latest surge in the Middle East.
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Israeli jets carried out three strikes before dawn Saturday, targeting missile production facilities and other military sites near Tehran and across western Iran, significantly escalating ongoing tensions between the two countries.
The strikes were more focused on military objectives than US officials had initially anticipated, reducing concerns that Israel might retaliate against Iran’s nuclear facilities or oil infrastructure following the Iranian missile attack on October 1. Is.
Analysts noted that geopolitical risk premiums, previously reflected in oil prices, began to subside following the strikes. City modified it price of brent crude As indicated by analysts led by Max Layton, the forecast for the next three months will drop from $74 to $70 per barrel, with this adjustment being attributed to a lower risk premium in the near term.
According to Calum McPherson, head of commodities at Investec, the decision not to target Iran’s oil infrastructure helped reduce the market’s risk premium and focused attention on potential actions by OPEC to stabilize the market amid sluggish demand growth. Concentrated.
OPEC And its allies kept their oil production policy unchanged last month, planning to increase output in December. The group is scheduled to meet on December 1 to discuss further.
Despite the strikes, tension remains. Iranian Foreign Ministry spokesman Esmail Baghai said on Monday that Iran would “use all available tools” in response to Israel’s recent actions. Meanwhile, Commonwealth Bank of Australia analyst Vivek Dhar expressed doubt over the conflict in the Middle East slowing down any time soon.
“As the new week begins, the price is testing the horizontal support of the last two years. An October close below $65 would be a major bearish signal that could accelerate oil’s decline. There is a danger of the dam breaking, the next downside target is the $50 area, which is a psychologically important intermediate level. The history of the declines of 2008-2009, 2014-2015 and 2020 suggests that the final ‘bottom’ may not come to the $30-35 area,” Kuptsikevich said.
