Oil fell 2% as Israeli officials seek to avoid a wider Middle East war By Reuters
Written by Laila Kearney
NEW YORK – Oil prices fell more than $1 a barrel on Monday after Israeli officials said they wanted to avoid drawing the Middle Eastern country into a major war in response to a deadly rocket strike on the Israeli-occupied Golan Heights. the weekend.
Futures for September delivery shed $1.39 to $79.74 a barrel, a 1.7% loss, at 11:17 am EDT (1517 GMT). It sank $1.40 to $75.76 a barrel, down 1.8 percent.
Two Israeli officials told Reuters on Monday that Israel wanted to hurt Lebanon's Iran-backed group Hezbollah, which the country blames for Saturday's attack that killed 12 children and teenagers, without sparking unrest across the region.
“That means the Gaza freeze may not be too far in the future,” said Bob Yawger, director of energy futures at Mizuho in New York.
On Sunday, Israel's security cabinet authorized Prime Minister Benjamin Netanyahu's government to decide “how and when” to respond to the attack on the football stadium.
Israel has vowed to retaliate in Lebanon against Iran-backed Hezbollah, which has denied any involvement in the attack. Israeli jets hit targets in southern Lebanon on Sunday.
The tensions have raised investor concerns about the potential impact on crude output from the world's largest oil producer, but so far output has not been affected.
“Despite geopolitical tensions in the Middle East, the lack of any supply disruptions limits any positive price reaction,” said UBS analyst Giovanni Staunovo.
“Concerns about oil demand, driven by weak economic data from China, is another factor that is not helping oil prices right now.”
Brent and WTI benchmarks fell 1.8% and 3.7% respectively last week on weak Chinese demand and hopes of a Gaza ceasefire deal.
Data released this month showed that the price of crude oil in China fell by 11% in the first half of 2024, raising concerns about the wider demand of the world's largest consumer.
Prices fell again at the end of last week on news that Nigeria's largest oil refinery, Dangote, was reselling US and Nigerian crude cargoes after technical problems at the plant.
Meanwhile, markets are eyeing Venezuela's oil producer after the country's election officials said President Nicolas Maduro had won a third term with 51% of the vote, despite many polls indicating the opposition had won.
The US had previously said it would “modify” its sanctions policy towards Venezuela depending on how the elections in the OPEC member country go.
