Oil falls 4% as Iran eases supply disruptions, demand outlook weakens Reuters
HOUSTON (Reuters) – Oil prices fell more than 4% to a nearly two-week low on Tuesday on weak demand for utilities and after a media report said Israel would not strike Iran's nuclear and oil facilities, easing fears of supply disruptions.
futures were down $3.54, or 4.57%, at $73.92 a barrel at 10:35 am CDT (1535 GMT). West Texas Intermediate futures lost $3.55, or 4.81%, to $70.28 a barrel.
Both benchmarks were down $4, their lowest since early October, after settling nearly 2% lower on Monday.
“We're seeing a reduction in the cost of the war we built last week,” said Phil Flynn, senior analyst at Price Futures Group. “What we're seeing, it's not really about supply, it's the risk of supply and demand.”
Brent and WTI are down about $5 so far this week, nearly erasing accumulated gains made after investors worried that Israel might strike Iran's oil facilities in retaliation for Tehran's Oct. 1 missile attack.
Israeli Prime Minister Benjamin Netanyahu told the United States that Israel is willing to attack Iran's military weapons, not nuclear or oil, the Washington Post reported Monday night.
Both the Organization of the Petroleum Exporting Countries and the International Energy Agency this week cut their forecasts for global oil demand growth in 2024, with China taking the lead in the cut.
OPEC has projected a stronger increase in global demand for the year than the IEA. But “its low maintenance is something to admit to wishful thinking,” says John Evans at oil retailer PVM.
Traders were watching spreads tighten, brokerage firm StoneX said in a morning paper.
“The December-December spread has tightened again, indicating a reduction in hedge funds' long positions,” StoneX said. “As the political risk environment appears to be easing, the oil market has pulled back from its recent bullish rally, now sitting at its lowest level in two weeks.”
