Oil falls 5pc on lower risk of wider Middle East war

HOUSTON: Oil prices tumbled by around $4 a barrel on Monday after Israel’s retaliatory strike against Iran’s military on Saturday bypassed oil and nuclear facilities, not disrupting energy supplies.
Brent futures were down $4.20, or 5.52 per cent, at $71.83 a barrel at 11:37am CDT (1637 GMT), while WTI US crude futures lost $4.08, or 5.68pc, to $67.70.
Both Brent and US West Texas Intermediate crude futures hit their lowest since Oct 1 at the open.
“Obviously, this is a perfect example of a headline-driven market,” said Phil Flynn, senior analyst at Price Futures Group. “We still have a lot of geopolitical risk.”
The benchmarks gained 4pc last week in volatile trade as markets reflected uncertainty over the looming US election and the extent of Israel’s expected response to the Iranian missile attack of Oct 1.
Citi lowered its Brent price target for the next three months to $70 a barrel from $74, factoring in a lower risk premium in the near term, analysts led by Max Layton said in a note.
The Organisation of the Petroleum Exporting Countries and its allies, a group known as Opec+, kept oil output policy unchanged last month, including a plan to start raising output from December. The group will meet on Dec 1 ahead of a full meeting of Opec+.
Tudor, Pickering Holt analyst Matt Portillo said WTI could trade much lower in the coming year.
Published in Dawn, October 29th, 2024