On Tuesday, Brent and U.S. crude oil futures dropped over $1 per barrel as markets saw reduced risk of a broader Middle Eastern war.
Benchmark Brent crude futures were $1.16, or 1.4% lower to $81.16 per barrel while U.S. West Texas Intermediate crude was $1.11, or 1.4% lower, to $78.95 per barrel.
Price Futures Group’s senior analyst, Phil Flynn, said markets had priced in an imminent Iranian attack against Israel within 24 to 48 hours. As that didn’t happen, the market took that risk premium out of the crude price.
On Monday, Brent rose over 3% and closed at $82.30 per barrel after a week earlier recording the lowest closing price in 7 months at $76.30.
On Monday, OPEC+ reduced expected demand in 2024 even as the group aims to increase output from October.
On Tuesday, the International Energy Agency kept its forecast for global oil demand growth in 2024 unchanged but reduced its estimate for 2025.
An escalation of Middle Eastern conflict may endanger crude supply from one of the main oil-producing regions in the world.
On Monday, John Kirby, the White House national security spokesperson said the U.S. has prepared for what may be substantial attacks by Iran or its proxies in the area as soon as this week.
