The rise in crude oil prices took a breather on Tuesday, as the market awaits Israel’s response to last week’s Iranian attacks, which caused prices to rise over concerns about a widening conflict in the Middle East.
The two benchmark contracts gained more than 3 percent the day before and reached their highest level since the end of August, adding to last week’s 8 percent advance, the largest in more than a year, due to fear that the Hostilities disrupt oil supplies from the Middle East.
At 1014 GMT, Brent futures were down $1.62, or 2 percent, at $79.31 a barrel, and U.S. West Texas Intermediate (WTI) futures were down $1.60, or 2.07 percent, at $75.54. . Brent surpassed $80 a barrel on Monday for the first time since August.
Ashley Kelty, an analyst at Panmure Liberum, said prices will remain volatile, but profit-taking could put pressure on the market absent a material shift in activity in the Middle East.
The rise in crude oil prices began after Iran launched a major missile attack on Israel on October 1. Israel has vowed to retaliate and is weighing its options, considering Iranian oil facilities as a possible target. For its part, China said it has “full confidence” in achieving its growth target for the full year, but refrained from introducing stronger fiscal measures, disappointing investors who had bet on greater support for the economy. Investors fear slowing growth will curb fuel demand in China, the world’s largest crude oil importer. In the United States, Hurricane Milton intensified to reach Category 5 on its way to Florida, after forcing the closure of at least one oil and gas platform in the Gulf of Mexico on Monday.
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