Oil prices slide over 4% on possible Hezbollah-Israel ceasefire
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Rising concerns of a spreading war in the Middle East pushed crude prices up 8 per cent last week.
PHOTO: REUTERS
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HOUSTON – Oil prices slid on Oct 8, settling down more than 4 per cent on news of a possible ceasefire between Hezbollah and Israel
On Oct 8, Brent crude futures fell 4.63 per cent to US$77.18 a barrel. US West Texas Intermediate (WTI) futures also finished down by 4.63 per cent to US$73.57. On Oct 9, Brent recovered a little ground, rising 0.6 per cent to US$77.63 by 0703 GMT. WTI climbed 0.4 per cent to US$73.90.
“We continue to be very headline-dependent,” said Mr John Kilduff, partner with Again Capital. “This morning, we heard about the potential ceasefire. Then we got indications targets are still being dialled in and energy targets are in the mix.”
Said Mr Phil Flynn, senior analyst at Price Futures Group: “That Hezbollah is open to a ceasefire, is the kind of headline that people jump on. There should be a lot of volatility up and down on this conflict.”
On Oct 7, Brent rose above US$80 per barrel for the first time since August after more than a 3 per cent daily gain. That followed the largest weekly climb in over a year, roughly 8 per cent, in the week to Oct 4 on rising concerns of a spreading war in the Middle East.
Hezbollah left the door open to a negotiated ceasefire after Israeli forces raised the stakes in the conflict with its Iran-backed enemy by making new incursions in the south of Lebanon.
Israel’s Defence Minister Yoav Gallant said it appeared the replacement for slain Hezbollah leader Sayyed Hassan Nasrallah had also been eliminated.
Late on Oct 8, Israel’s military warned people to stay away from specific buildings in the southern suburbs of Beirut.
The oil price rally began after Iran launched a missile barrage at Israel on Oct 1. Tel Aviv has sworn to retaliate and said it was weighing its options.
Some analysts said an attack on Iranian oil infrastructure was unlikely and warned prices could face considerable downward pressure if Israel focuses on any other target.
In the United States, Hurricane Milton intensified into a Category 5 storm on its way to Florida after forcing at least one oil and gas platform in the Gulf of Mexico to shut down on Oct 4.
US crude oil stocks rose by nearly 11 million barrels last week, while fuel stockpiles fell, according to market sources citing American Petroleum Institute figures on Oct 8.
Crude stocks rose by 10.96 million barrels in the week ended Oct 4, the sources said on condition of anonymity. REUTERS
