Oil has sunk this Monday 5.5% (Brent barrel: $71.86; WTI barrel: $67.81) after Israel's response this weekend to Iran, which has been more limited than expected.
Israel's attack has avoided Tehran's oil and nuclear facilities and has not interrupted energy supplieswhich eases geopolitical tensions in the Middle East. Dozens of Israeli aircraft completed three waves of strikes before dawn Saturday on missile factories and other sites near Tehran and in western Iran, in the latest exchange in the escalating conflict in the Middle East. Iran has lessened the impact of Israel's attack. The General Staff of the Iranian Armed Forces has issued a statement, collected by the Islamic Republic News Agency (IRNA), in which the following statement stands out: «Iran, although it reserves its legal and legitimate right to respond in the appropriate time, emphasizes the establishment of a lasting ceasefire in Gaza and Lebanon to prevent the slaughter of defenseless and oppressed people at the hands of the Zionist regime.» Chris Weston, research director at Pepperstone, says that while the weekend news from the Middle East has not been good, «Israel's anticipated retaliation against Iran has been targeted enough for energy operators to be confident that Iranian crude facilities will not be part of the ongoing conflict«.»Israel's actions, at least in the weekend response, reduce the likelihood that other regional and Western actors will become involvedand today the operators have eliminated a large part of the geopolitical risk premium that was still discounted in the futures of crude oil, gasoline and, to a lesser extent, in gold.» According to this expert, with the possibility that the oil facilities of Iran be left out of Israel's military plans, The demand side of the crude oil supply/demand equation should become increasingly influential as a short-term price driver.and the price of crude oil will focus on top-line growth data, as well as Expectations that Chinese authorities will offer concrete proposals at next week's NPC (National People's Congress) meeting (November 4-8), «providing the clarity the market needs on its plans to stimulate consumption and demand.» In fact, for strategists, Recent events in the Middle East have changed market risk perception. «Following limited fighting in the region over the weekend, markets see escalation risks reduced. Additionally, fears of supply disruption eased as oil infrastructure was not attacked. While caution could still be present in the market Due to the possibility of renewed hostilities, the immediate outlook appears more stable. The easing of geopolitical concerns could generate further downward pressure on global crude oil prices,» said George Pavel, general manager of Capex.com in the Middle East. However, the situation in the region remains unstable, as Israel has continued its military offensive in the region.»The potential for future tensions should not be underestimated. Although the immediate threat appears to have diminished, the situation in the Middle East can change rapidly and affect energy markets in unpredictable ways. The international community and the main players in the energy market will closely follow the events that occur in the region. The presence of non-state actors, such as Hamas and Hezbollah, adds an element of uncertaintyas these groups can influence regional stability,» comments Antonio Ernesto Di Giacomo, senior market analyst at XS.com.