Written by Colleen Howe
BEIJING (Reuters) – Oil prices tumbled in Asian trading on Monday as market participants lowered risk premiums following an Iranian attack on Israel late on Saturday that the Israeli government said caused limited damage. fell.
Futures for June delivery fell 24 cents to $90.21 a barrel, while West Texas Intermediate (WTI) futures for May delivery fell 38 cents to $85.28 a barrel at 1256 GMT. became.
The attack, which included more than 300 missiles and drones, was the first foreign attack on Israel in more than 30 years. It had raised concerns about a broader regional conflict affecting oil shipments through the Middle East.
However, the attack, which Iran claimed was in retaliation for an airstrike on the Damascus consulate, caused only minor damage as the missile was shot down by Israel’s Iron Dome defense system. Israel, which is at war with Iran-backed Hamas militants in the Gaza Strip, has neither confirmed nor denied the attack on the consulate.
Israeli officials said the country’s war cabinet was in favor of retaliation, but said the United States would not participate in any attack against Iran. World powers, other Arab states and the UN Secretary-General have called for restraint.
IG Market Analyst Tony Sycamore said, “Iran’s retaliatory missile and drone strikes against Israel yesterday morning have not caused enough damage to provoke further escalation of hostilities at this time, and are a sign of concern for Iranian military personnel in Syria. “It appears to be large enough to avenge the killing.” Client notes.
Oil indexes rose on Friday in anticipation of a retaliatory attack by Iran, hitting their highest since October.
But prices still ended the week down about 1% after the International Energy Agency cut its forecast for oil demand growth this year.
Analysts this morning expected at least a short-term price increase, despite the limited damage suffered by Israel.
Rystad Energy senior vice president Jorge Leon said the attack marked “an unprecedented and dangerous development in an already unstable region.”
Analysts said a larger and longer-lasting price impact would require significant supply disruptions, such as restricting shipping in the Strait of Hormuz near Iran.
So far, the conflict between Israel and Hamas has had little visible impact on oil supplies.
Sycamore said prices were also weighed down by the “uncertainty of the Fed’s path to rate cuts” due to persistent U.S. inflation. “However, in the medium term, continued geopolitical instability in the Middle East and Europe means all risks remain on the upside towards $90.”
