HOUSTON: Brent and US crude oil futures fell more than $1 a barrel on Tuesday as markets saw reduced risk of a wider war in the Middle East. Benchmark Brent crude futures were down $1.16, or 1.4% at $81.16 a barrel as of 9:13 a.m. Central time (1413 GMT) while US West Texas Intermediate crude was down $1.11, or 1.4%, at $78.95 a barrel.

“The markets had priced in an imminent attack by Iran against Israel within 24 to 48 hours,” said Phil Flynn, senior analyst at Price Futures Group. “That hasn’t happened. The market is taking that risk premium out of the price for crude.”

Brent on Monday gained more than 3%, closing at $82.30 a barrel after hitting the lowest closing price in seven months, $76.30, a week earlier. The Organization of the Petroleum Exporting Countries cut expected demand in 2024 on Monday even as the group and its allies, known as OPEC+, aim to raise output from October.

The International Energy Agency kept its 2024 global oil demand growth forecast unchanged on Tuesday but trimmed its 2025 estimate, citing the impact of lacklustre Chinese consumption on economic growth.

An escalation of conflict in the Middle East could endanger crude supply from one of the world’s main oil-producing regions. The US has prepared for what could be significant attacks by Iran or its proxies in the region as soon as this week, White House national security spokesperson John Kirby said on Monday.

Markets are also awaiting Wednesday’s US consumer price index report that will give a crucial read on inflation.