Oil prices see recovery after easing geopolitical tensions in Middle East trigger declines
Date
10/29/2024 5:42:10 AM
(MENAFN) Oil prices saw a slight recovery on Tuesday following a period of losses triggered by easing geopolitical tensions in the Middle East. The international benchmark brent crude rose by 0.45 percent to USD71.32 per barrel, up from the previous session's close of USD71, while the US benchmark West Texas Intermediate also increased by 0.45 percent, reaching USD67.68 per barrel compared to USD67.38 in the prior session. Over the past month, concerns about potential Israeli military actions against Iran's energy infrastructure had previously driven up prices due to fears of a broader regional conflict.
On October 26, Israel conducted retaliatory strikes on military targets in Iran following missile attacks from Iran on October 1. Although Israel reported the strikes as successful, Iranian officials claimed that their air defense systems limited the damage. Following these events, oil prices experienced a significant drop of over 6 percent on Monday, as the market reacted to the fact that the strikes did not target oil or nuclear facilities, which eased some fears of escalating conflict in the region.
Despite the slight recovery in prices, tensions in the Middle East remain high. Iranian President Masoud Pezeshkian emphasized that while Iran does not seek war, they are prepared to defend their rights against Israeli aggression. Additionally, the recent surge in the US dollar, particularly with upcoming elections, has contributed to the decline in oil prices, as a stronger dollar typically reduces demand by making oil more expensive for foreign currency holders.
In a supportive move for the oil market, the US Department of Energy's Office of Petroleum Reserves announced plans to purchase up to 3 million barrels of oil for the Strategic Petroleum Reserve, scheduled for delivery between April and May 2025. This action aims to bolster the SPR and may provide some stability to oil prices amid fluctuating market conditions and geopolitical uncertainties.
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