Oil is losing 4.5% in price on Monday, as the market assesses news from the Middle East.
As reported, on the night of October 26, Israel launched a series of air strikes on Iranian military targets. The attack was Israel’s response to the strike on the country by Iranian forces on October 1.
The fact that Israel did not attack Iran’s oil facilities, as well as the smaller-than-expected scale of the attack in general, eased traders’ fears of a possible escalation of the conflict, Market Watch notes.
“Israel’s attack did not affect energy infrastructure and was limited in scope. This is likely to ease fears of a direct conflict with Iran,” said Jay Hatfield, CEO of Infrastructure Capital Advisors.
The cost of December futures for Brent on the London ICE Futures exchange as of 7:15 a.m. is $72.63 per barrel, which is $3.42 (4.5%) lower than at the close of the previous trading. On Friday, these contracts rose by $1.67 (2.3%) to $76.05 per barrel.
December futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $3.34 (4.65%) to $68.44 per barrel. At the end of the previous session, the value of these contracts increased by $1.59 (2.3%) to $71.78 per barrel.
Price Futures Group analyst Phil Flynn notes, however, that the oil market’s concerns about the Middle East conflict will persist.
“The bottom line is that the immediate threat of oil supply disruptions from the region has passed. However, if you think this will put an end to the conflict, I don’t think so. Even if Iran doesn’t respond to this strike, I think it will try to make sure that its proxies regroup and respond one way or another,” the Market Watch expert said.
