Oil falls for a fourth day as expectations grow for lower risk of Iran war escalation
USO•Oil prices fell for a fourth day, with Brent down 1.03% to $93.65 a barrel and U.S. crude down 1.29% to $86.98. The decline followed an 8% drop in both benchmarks in the previous session, as markets weighed prospects for reduced Iran war escalation.
1. Prices extend declines
Brent futures fell 97 cents, or 1.03%, to $93.65 a barrel, while U.S. West Texas Intermediate crude fell $1.14, or 1.29%, to $86.98. Both benchmarks had tumbled more than 8% in the previous session, settling at their lowest levels since August 31.
2. Supply and conflict risks
Markets weighed whether election losses for President Donald Trump's Republican Party could reduce the risk of further escalation in the U.S.-Israeli war on Iran. Analysts said oil shipments through the Strait of Hormuz had recovered close to pre-war levels, while JPMorgan estimated the market returned to a surplus of 1.1 million barrels per day in September and 1.4 million in October.
3. Uncertainty remains
Analysts cautioned that prices could remain volatile, citing uncertainty over diplomacy, low commercial inventories in major consuming countries and the timing of the incoming Congress taking office in January. U.S. crude, gasoline and distillate inventories fell last week as demand reached its highest level in a year, the Energy Information Administration said.
