Crude oil futures dropped on Sunday after Israeli airstrikes on Iran avoided targeting key oil facilities.
West Texas Intermediate crude futures initially fell over 5% but later settled at a 4.6% decrease, reaching $68.48 a barrel as of 11 p.m. Eastern. Meanwhile, Brent crude, the global benchmark, declined 4.4%, landing at $72.34 a barrel.
Concerns over potential disruptions to Iran’s oil supply fueled an increase in oil prices last week. This stemmed from the anticipation that Israel’s response to an Iranian missile attack on October 1 would include strikes on Iran’s oil facilities, which could spark broader conflict in the Middle East. Instead, Israel’s strikes on Saturday focused on Iranian air-defense systems and military sites. The limited nature of the attack led some analysts to predict that tensions might not escalate significantly.
“Israel’s attack avoided energy sites and was narrow in scope. This limited action should ease concerns about a direct conflict with Iran, likely leading oil prices to drop when trading resumes on Sunday,” noted Jay Hatfield, CEO at Infrastructure Capital Advisors. Hatfield added that oil prices might stabilize within the $75-$95 range as the winter heating and travel season approaches.
However, Phil Flynn, senior market analyst at Price Futures Group, cautioned that concerns over oil supplies from the Persian Gulf remain. “While the immediate risk of supply disruption has subsided, this does not mark the end of hostilities,” he stated in a Sunday note. “Even though Iran has indicated they won’t retaliate, it’s likely they will encourage proxies to regroup and respond in some form.”
In the financial markets, U.S. stock futures climbed on Sunday evening. Dow Jones Industrial Average futures rose 0.4%, or 185 points. S&P 500 futures increased by 0.5%, adding 30 points, and Nasdaq-100 futures saw a 0.6% gain, rising 130 points, suggesting continued momentum in the tech sector.
On Friday, the Nasdaq marked its seventh consecutive week of gains, sitting just 0.7% below its record high. The Dow and S&P 500, however, each closed the week with losses, breaking six-week winning streaks.
Related Topics:
- How to Buy Brent Crude Oil Stock?
- How to Buy WTI Futures: A Comprehensive Guide
- What Time Does Brent Oil Market Close?