Latest News

Oil sheds 1% after Iran attack, US economic data


By Laila Kearney

NEW YORK (Reuters) – Oil prices sank by about 1% a barrel on Monday after Iran’s weekend attack on Israel proved to be less damaging than anticipated, easing concerns of a quickly intensifying conflict that could displace crude barrels.

Brent futures for June delivery fell 91 cents to $89.54 a barrel, a 1% loss, by 1:17 p.m. EDT (1717 GMT). U.S. crude futures for May delivery fell 87 cents to $84.79 per barrel, a 1% loss.

Oil benchmarks had risen on Friday in anticipation of Iran’s retaliatory assault, with prices soaring to their highest since October.

Israel’s interception of Iran’s attack, which involved more than 300 missiles and drones, calmed fears of a regional conflict affecting oil traffic through the Middle East.

“The success of the Israeli defense implies that the geopolitical risk has pulled back considerably,” said Bob Yawger, director of energy futures at Mizuho bank.

Strong U.S retail sales data from the Commerce Department also hindered oil prices, Yawger added, by increasing the likelihood that interest rates in the world’s biggest economy would remain higher for longer and reduce demand for oil.

“The key term in that whole scenario is demand destruction,” Yawger said.

In the Middle East, Iran saying it considers its retaliation to be over has further lowered the geopolitical temperature, said Kpler analyst Viktor Katona, while John Evans at oil broker PVM said the Iranian drone and missile attack was “about as telegraphed a world event that people can remember.”

“They might as well have had big disco lights on them and towed banners with ‘come on, ladies and gentlemen, please shoot me down.’”

The attack, which Iran called retaliation for an air strike on its Damascus consulate, caused only modest damage, with missiles shot down by Israel’s Iron Dome defence system.

Iran produces more than 3 million barrels per day of crude oil as a major producer within the Organization of the Petroleum Exporting Countries (OPEC).

Middle East hostilities centred on the Israel-Hamas conflict in Gaza have had little tangible impact on oil supply so far.

“If the crisis does not escalate to a point that creates supply disruptions, then there will be downside risk over time, but only once it becomes clear Israel has chosen a measured response,” said Amrita Sen, founder and director of research at Energy Aspects.

Bitcoin halving performance: Does price always rise? Citi analyzes past trends

Previous article

US stocks fall as Treasury yields spike after retail sales comes in hot

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News