Market participants lowered risk premiums following Iran’s attack on Israel, which caused limited damage.
World oil prices fell on the first day of the new working week. This was confirmed by the trading results on Monday, April 15.
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Thus, June Brent oil futures fell in price on the London ICE Futures exchange by $0.80 (0.88%) to $89.65 per barrel. Last Friday, Brent rose $0.71 (0.8%) to $90.45 a barrel.
May futures for WTI taffeta were down $0.88 (1.03%) at $84.78 a barrel on the NYMEX Mercantile Exchange in New York. In the previous session, the contract increased by $0.64 (0.8%) to $85.66 per barrel.
According to Reuters, oil prices fell as market participants lowered risk premiums after Iran’s attack on Israel, which caused limited damage.
The attack, using more than 300 missiles and drones, was the first attack on Israel by a foreign country in more than 30 years, raising concerns about a wider conflict in the region affecting shipments of oil throughout the Middle East.
But the attack, which Iran said was in retaliation for an airstrike on its embassy in Damascus, caused only moderate damage, with the missiles shot down by Israeli air defenses and with the help of other countries.
“The attack was more calculated in the days leading up to it. Additionally, the limited damage and the fact that there were no casualties meant that there could have been a more measured Israeli response,” said Warren Patterson, head of commodity strategy at ING.
However, he said, “clearly there is still a lot of uncertainty, and everything depends on how Israel reacts now.”
With Iran currently producing more than 3 million barrels per day of crude as the main producer within OPEC, supply risks include stricter enforcement of oil sanctions and that the Israeli response could include attack on Iran’s energy infrastructure, ING said.
But even with a major supply loss, the US could draw more crude from its strategic oil reserves, while OPEC has more than 5 million barrels per day of spare production capacity, it said.
“If prices rise significantly on the back of supply cuts, one would expect the group to seek to put some of this spare capacity back into the market. OPEC does not want prices to rise too much high, due to the risk of demand deterioration “said ING.
As you know, on April 12, oil prices rose in anticipation of a retaliatory attack from Iran, reaching their highest level since October. Market analysts this morning expected at least a short-term increase in prices, but the larger, longer-term implications of the price hike would require significant supply disruptions, such as shipping restrictions in the Strait of Hormuz.
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Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.