Oil futures experienced a sharp decline on Monday, with prices falling more than 4% in early trading. The drop comes after Israeli airstrikes over the weekend targeted military installations in Iran but notably avoided hitting critical energy assets such as oil fields and nuclear facilities. This development alleviated fears of significant disruptions to oil supplies from the Middle East. As a result, Brent crude prices decreased by 4.27%, settling at $72.80 per barrel, while West Texas Intermediate (WTI) fell 4.45% to $68.60 as of 08:30 Bulgarian time.
The airstrikes were a response to Iranian missile attacks that occurred in early October, escalating geopolitical tensions in the region. However, Israel’s measured military response has calmed market anxieties, fostering optimism for potential de-escalation and alleviating broader concerns about energy supply disruptions.
Oil price volatility has characterized the market throughout October, largely driven by ongoing instability in the Middle East. Additionally, worries about demand have intensified, particularly as China, the world’s largest oil consumer, exhibits signs of economic slowdown. Recent data indicated a decline in industrial profits within China, despite the government’s efforts to stimulate the economy.
Market participants are also closely observing potential actions from OPEC+ regarding production levels, with discussions underway about a possible increase in output starting in December. Furthermore, the approaching U.S. presidential election, less than two weeks away, adds another layer of uncertainty that could impact the energy sector.
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