Oil prices saw a downward drift on Monday as the market appeared to play down concerns about a wider regional conflict following Iran’s weekend attack on Israel.
Brent futures for June delivery were down 81 cents, or about 0.9%, at $89.64 a barrel by 1335 GMT, while West Texas Intermediate (WTI) futures for May delivery were down 69 cents, or about 0.8%, to settle at $84.97. Oil benchmarks rose on Friday ahead of Iran’s retaliatory action, pushing prices to their highest levels since October.
Also read: Crude oil prices may reach $100 per barrel if Iran-Israel tensions rise, experts say.
“Crude oil fell around $85 after Israel successfully defended itself against Iran’s large-scale air strike over the weekend, and the United States underlined its desire to prevent a larger Middle East conflict. The Iranian strike did minimal damage in Israel. If the crisis does not escalate to a point , which creates supply disruptions, will then be a disadvantage over time, but only after it becomes clear that Israel has opted for a measured response,” said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.
He further added, “We expect WTI crude oil to be between $80 to $90. On MCX platform Rs6900 will act as an important support level, only below this level, it will come in a negative trend.”
Iran’s attack consisted of more than 300 missiles and drones, marking the first attack on Israel by another nation in more than three decades. This event raised concerns about a wider regional conflict that could affect oil traffic across the Middle East.
Kpler analyst Viktor Katona noted that Iran’s declaration to consider its retaliation over has eased geopolitical tensions, while John Evans of oil broker PVM described the Iranian drone and missile attack as one of the most anticipated global events in recent memory.
The attack, classified by Iran as retaliation for an airstrike on its Damascus consulate, resulted in minimal damage, with Israel’s Iron Dome defense system intercepting several missiles.
“The likelihood of an attack was largely factored into market expectations in the days leading up to it. Moreover, the limited damage and absence of casualties suggest that Israel’s response may be more moderate,” Warren Patterson, ING’s head of commodities, was quoted as saying. strategy as Reuters says.
Also Read: Oil prices fall, energy security concerns rise amid West Asia tensions
Iran, a significant member of the Organization of the Petroleum Exporting Countries (OPEC), produces more than 3 million barrels per day (bpd) of oil. Despite ongoing Middle East hostilities, particularly focused on the Israel-Hamas conflict in Gaza, there has been minimal visible impact on oil supply so far.
“Crude prices tended to be weak below 85 $ in WTI, because military tensions were seen neutral as of now between IRAN and Israel after the weekend escalation of tension was seen high, which last week kept prices high. Currently there is no significant reaction in Crude price on Middle East war, as there are no signs of supply from Iran. Crude’s range is lower to 6900rs in MCX as selling is seen on increases near 7125,” said Jateen Trivedi, VP Research Analyst – Commodities and Currency, LKP Securities.
(With inputs from Reuters)
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Published: 15 Apr 2024, 22:25 IST