HOUSTON: Oil prices fell on Tuesday on easing concerns about potential supply disruptions from the battle between Israel and Hamas though traders remained watchful.

Brent crude was down 47 cents at $87.68 a barrel as of 11:35 CDT (1635 GMT), while US West Texas Intermediate (WTI) crude fell 42 cents to $85.92 a barrel. Both benchmarks had fallen by more than $1 in earlier trade.

“Today it’s more like a ping pong game of fear-on, fear-off rather than trading on fundamentals,” said Phil Flynn, an analyst at Price Futures Group.

Brent and WTI had surged more than $3.50 on Monday as the military clashes raised fears that the conflict could spread beyond Gaza. “After solid gains in the previous session of over 4pc the oil markets have turned cautious with prices edging lower,” said Fiona Cincotta, senior financial markets analyst with City Index.

“For now, the market seems to accept that oil flows will not be directly affected, with no proof that there will be a meaningful reduction in oil exports,” Cincotta said. Vivek Dhar, an energy analyst at CBA, said the revelation of evidence of the Iranian involvement would push prices higher.

“We continue to believe that Brent oil will ultimately stabilise between $90-$100 per barrel in Q4 2023,” said Dhar, adding that the Palestine-Israel conflict raises the risk of Brent futures tracking at $100 a barrel and above

Published in Dawn, October 11th, 2023