By Adedapo Adesanya
Oil prices slipped on Monday after Iran’s weekend attack on Israel proved to be less damaging than anticipated, easing concerns of a quickly intensifying conflict that could affect the crude market.
Brent futures settled at $90.10 a barrel, down 35 cents, or 0.4 per cent while US West Texas Intermediate (WTI) crude futures for May delivery fell 25 cents, or 0.3 per cent to end at $85.41 a barrel.
Oil dropped by more than $1 a barrel earlier in the session but saw some recovery after Israel’s Prime Minister Benjamin Netanyahu summoned his war cabinet for the second time in less than 24 hours.
The conclusion of Israel’s three-hour-long war cabinet was to find a solution that inflicts harm on Iran without causing an all-out regional war, according to Israel’s Channel 12 news, suggesting that actions would be coordinated with the U.S.
As of the time of writing, Israel’s war cabinet had not released any updated information on its planned response, but was also reportedly considering diplomatic options.
On Saturday, Iran retaliated against Israel for the levelling of the Iranian diplomatic mission in Damascus, Syria, in which a top military general and other diplomats were killed. Iran sent over 300 drones and missiles towards Israel, with all but a few intercepted by Israeli and its allies, including the US.
World leaders continue to preach restraint, urging Israel to avoid retaliation, with British Foreign Secretary David Cameron saying the UK would not support a retaliatory strike by the Israelis while France has likewise said it would do everything necessary to avoid another retaliation.
Iran produces more than 3 million barrels per day of crude oil as a major producer within the Organisation of the Petroleum Exporting Countries (OPEC).
Middle East hostilities centred on the Israel-Hamas conflict in Gaza have had little tangible impact on oil supply so far.
Strong US retail sales data from the Commerce Department also hindered oil prices as it increased the likelihood that interest rates in the world’s biggest economy would remain higher for longer and reduce demand for oil.
Rising US oil output also weighed on oil prices, with the US Energy Information Administration (EIA) saying output from top shale-producing regions will climb by more than 16,000 barrels per day to 9.86 million barrels per day, or the highest level in five months.
