HOUSTON: Oil slipped more than 3% on Monday as fears eased that the Israel-Hamas war would disrupt supply from the region, and as investors grew cautious ahead of this week’s US Federal Reserve meeting.
Brent crude futures were down $3.01, or 3.33%, at $87.47 a barrel by 12:23 p.m.. CDT (1723 GMT), while US West Texas Intermediate crude was $3.62, or 4.27%, lower at $81.91.
“The main feature here has been the market reacting to events between Israel and Hamas,” said Jim Ritterbusch, president of Ritterbusch & Associates.
“Macroeconomic factors could easily emerge later this week, when we’ll see if the Fed has something to say.”
Crude jumped 3% on Friday after Israel stepped up ground incursions into Gaza, stoking worries the conflict could expand in a region that accounts for a third of global oil output. However, that concern was fading on Monday, analysts said.
“The war premium has come out of the market,” said Phil Flynn, analyst at Price Futures Group. “It’s a situation where over the weekend the war seemed to intensify, but there seems to be no disruption to supply.”
Israeli troops and tanks attacked Gaza’s main northern city from the east and west on Monday, three days after it began ground operations in the Palestinian enclave.
“There is a propensity for market users in all their guises to have at least some oil length going into the weekends, and when the fear of conflict spread shows no validation... that fear hedge is ordinarily unwound,” said John Evans of oil broker PVM.
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