This is due to investor distrust of China’s plans to stimulate the economy and fear that Israel could attack Iran’s oil infrastructure.
According to Reuters, Brent crude futures fell $1.35 (1.7%) to $77.69 per barrel. At the same time, US West Texas Intermediate crude oil futures fell $1.32 (1.75%) to $74.24 per barrel.
Analysts note that China’s monetary stimulus measures have not sparked optimism among market participants.
“The announcement by the Chinese Ministry of Finance about its intention to apply for additional loans turned out to be detailed, but without concrete and encouraging details,” commented Tamas Varga of the brokerage company PVM.
He also added that deflationary pressure on input prices in China continued in September amid weak consumer demand.
China’s consumer price index missed expectations last month and input prices have fallen sharply over the past six months, losing 2.8% year-on-year. Downbeat economic data from China had a bigger impact on the oil market than concerns about a possible Israeli response to Iranian actions.
“Markets are ‘going with the flow’ ahead of Israeli retaliation against Iran, and prices will have no real direction until the situation in the Middle East becomes clearer,” said Ashley Kelty, analyst at Panmure Liberum.
At the same time, according to sources, the United States asked Israel to cautiously approach possible retaliatory measures to avoid escalating the conflict and breaking out into a larger war in the Middle East.
Previously, Kursor reported how a possible Israeli attack on Iran would affect the oil market.
