Yahoo Finance Oil pares losses as traders await Israel’s response to Iran
(Bloomberg) — Oil retreated from session lows as traders await Israel’s imminent response to an unprecedented attack from Iran.
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West Texas Intermediate traded little changed near $85.50 a barrel as Israeli officials were quoted by media outlets as saying Israel will retaliate against Iran. Prices had fallen as much as 2% earlier on hopes that the conflict would remain contained.
Ahead of the strike this weekend, crude surged to a five-month high but fell after most of the 300 drones and missiles fired by Iran were intercepted.
“At this juncture, the outlook for oil seems to hinge on Israeli response to the attack,” JPMorgan Chase & Co. analysts including Natasha Kaneva wrote in a note to clients. “Nevertheless, with bellicose rhetoric coming from both sides, markets might continue to place a sizeable premium on the price of oil in the immediate term.”
Oil has been one of the strongest performers in commodities this year as OPEC+ keeps a tight rein on supply to drain inventories and support prices. The increase in Middle East tensions has boosted prices in recent weeks, with analysts highlighting the possibility oil could once again hit $100 a barrel. Societe Generale SA revised its forecast notably higher, saying in a note that direct military action between the US and Iran could send Brent to $140.
Shipping risks have also been in focus after Iran seized a vessel, the MSC Aries, near the key Strait of Hormuz shortly before the strikes against Israel. The ship’s beneficial owner is part of Israel-linked Zodiac Group, according to data compiled by Bloomberg. The move raises fresh concerns over the safety of vessels in the region, adding to previous logistical disruptions.
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