Oil falls after China’s briefing with eyes on Israel-Iran conflict
Hedge funds are fleeing bearish bets against the crude benchmark at the fastest pace in nearly eight years
OIL declined after China’s highly anticipated finance ministry briefing last Saturday (Oct 12) lacked new incentives to boost consumption in the biggest importer, with the spectre of Israeli strikes on Iran hanging over the market.
Brent fell almost 2 per cent early on Monday, before recovering to trade near US$78. Meanwhile, West Texas Intermediate dropped below US$75.
Despite Beijing’s promises of more support for the struggling property sector and hinting at greater government borrowing, the briefing did not produce the headline dollar figure for fresh fiscal stimulus that the markets had sought.
Meanwhile, oil traders have continued to monitor Israel’s response to Iran’s Oct 1 ballistic missile attack, with one report suggesting it has narrowed down potential targets to military and energy infrastructure.
Over the weekend, a Hezbollah drone attack killed four Israeli soldiers, while the US Pentagon said it would send an advanced missile defence system and associated troops to help shield its ally.
“A bumpy recovery in Chinese demand overshadowed the concerns of further escalation in the Middle East, which could dampen the flow of oil barrels from the key producing nations,” Priyanka Sachdeva, a senior market analyst at brokerage Phillip Nova in Singapore, said.
“Oil prices are largely expected to be range-bound,” she added.
Brent has risen about 9 per cent this month, as the prospect of an escalation in the Middle East conflict threatens output from a region that supplies about a third of the world’s oil.
Hedge funds have fled bearish bets against the crude benchmark at the fastest pace in nearly eight years, amid tensions in the Middle East. BLOOMBERG
Share with us your feedback on BT's products and services
