Oil prices drop 3% as Israel eases fears of strikes on Iranian oil
Shafaq News/ Oil prices slid 3%during Asian trade on Tuesday on the back of a weaker demand outlook and aftera media report said Israel is willing not to strike Iranian oil targets, whicheased fears of a supply disruption.
Brent crude futures were down $2.35,or 3%, at $75.11 per barrel at 0445 GMT, while U.S. West Texas Intermediatefutures fell $2.26, or 3.1%, to $71.57 per barrel.
Both benchmarks had settled about 2%lower on Monday. They are down almost $4 so far this week, nearly wiping outcumulative gains made in the seven sessions up to last Friday when investorswere concerned about supply risks as Israel planned to retaliate against amissile attack from Iran.
Israeli Prime Minister BenjaminNetanyahu told the U.S. that Israel is willing to strike Iranian militarytargets and not nuclear or oil ones, the Washington Post reported late onMonday.
"Weakening demand has led totraders withdrawing the 'war premium' from prices," said PriyankaSachdeva, senior market analyst at Phillip Nova.
"However, geopolitics stillcontinues to support oil at this level. Without geopolitics in the equation,oil would have tumbled even more, maybe even below $70 per barrel mark amid thecurrent weakening demand narrative."
The Organization of the PetroleumExporting Countries (OPEC) on Monday cut its forecast for global oil demandgrowth in 2024, with China accounting for the bulk of the downgrade. China'sdemand is now seen growing by 580,000 barrels per day (bpd) this year, downfrom 650,000 bpd.
OPEC also lowered its global oildemand growth projection for next year to 1.64 million bpd from 1.74 millionbpd.
China's customs data showed thatSeptember oil imports fell from a year earlier, as plants curbed purchasesbecause of weak domestic fuel demand and narrowing export margins.
Independent market analyst Tina Tengsaid that while the demand outlook remains weak due to record high U.S.production and soft Chinese demand, "oil retreated from the MiddleEast-tension-led surge as the market reaction may have been overdone."
In the Middle East, Israel expandedits targets in its war against Hezbollah militants in Lebanon on Monday,killing at least 21 people in an airstrike in the north.
(REUTERS)
