Brent crude futures for June delivery fell 91 cents to $89.54 a barrel, a loss of 1%, as of 1:17 p.m. EDT (17:17 GMT). U.S. crude futures for May delivery fell 87 cents to $84.79 a barrel, a loss of 1%.
Oil prices rose on Friday in anticipation of Iran’s retaliation, with prices reaching their highest level since October.
Israel’s interception of the Iranian attack, which involved more than 300 missiles and drones, eased fears of a regional conflict affecting oil traffic across the Middle East.
“Israeli defense success implies that geopolitical risk has significantly decreased,” said Bob Yawger, director of energy futures at Mizuho Bank.
Strong retail sales data from the U.S. Commerce Department also weighed on oil prices, Yawger added, increasing the likelihood that interest rates in the world’s largest economy will remain higher longer. long and reduce the demand for oil.
“The key term in this whole scenario is demand destruction,” Yawger said.
In the Middle East, Iran’s view that its retaliation is over has further lowered the geopolitical temperature, said Viktor Katona, an analyst at Kpler, while John Evans of oil broker PVM said the Iranian drone attack and missile was “about as telegraphed a world event as people can remember.
“They might as well have had big disco lights on them and towing banners with ‘Come on, ladies and gentlemen, please shoot me.'”
The attack, which Iran said was retaliation for an airstrike on its consulate in Damascus, caused only modest damage, with the missiles shot down by Israel’s Iron Dome defense system.
Iran produces more than 3 million barrels per day of crude oil as a major producer in the Organization of the Petroleum Exporting Countries (OPEC).
Hostilities in the Middle East, centered on the Israel-Hamas conflict in Gaza, have so far had little tangible impact on oil supplies.
“If the crisis does not worsen to the point of causing supply disruptions, then there will be a downside risk over time, but only when it becomes clear that Israel has chosen a measured response,” he said. said Amrita Sen, founder and research director at Energy Aspects. .
