Oil Slips Over $1 As Supply Intact Despite Middle East Conflict Fears

(MENAFN- Live Mint) (Updates with settlement price at 2:30 p.m. ET)

By Arathy Somasekhar

HOUSTON, Aug 1 (Reuters) - Oil prices settled more than $1 lower on Thursday as global supply seemed largely unaffected by worries of a wider Middle East crisis after the killing of a Hamas leader in Iran, and as investors refocused on demand concerns.

Global benchmark Brent crude futures closed $1.32, or 1.6%, lower at $79.52 a barrel, while U.S. West Texas Intermediate crude fell $1.60, or 2.1%, to $76.31.

In the previous session, the most active contracts on both benchmarks jumped about 4% as worries about a wider conflict in the Middle East were stoked by the killing of Hamas leader Ismail Haniyeh in the Iranian capital Tehran shortly after Hezbollah's most senior military commander in Beirut.

"I think there is a growing realization that we haven't seen any real supply disruption. The market is refocusing itself away from geopolitical issues, and looking at global demand for crude," said Dennis Kissler, senior vice president of trading at BOK Financial.

However, investors were keeping a close eye on any disruptions, particularly to oil shipping lanes, analysts said. Iran-aligned Houthi militants have attacked ships passing through the Red Sea, forcing tankers to choose longer alternate routes.

A meeting of top OPEC ministers kept oil output policy unchanged including a plan to start unwinding one layer of output cuts from October.

OPEC 's policy as agreed in June calls for some members to gradually phase out cuts of 2.2 million barrels per day from October 2024 to September 2025. The group also agreed to extend earlier cuts of 3.66 million bpd until end-2025.

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