Oil prices drop below $73 despite attacks on Iran

Oil prices slipped despite Israel’s latest counterattack on an Iranian military facility that killed four.

Oil prices opened Monday lower with Brent trading more than 4% lower, taking the market back below $73 per barrel, ING commodities strategists said in a note today.

The crude oil prices dipped despite the fact that Israel finally responding over the weekend to Iran’s recent missile attack.

However, Israel’s response appears to have been measured with only Iranian air defence and missile production facilities targeted, analysts said, noting that the concern for the market had been if Israel targeted Iran’s energy or nuclear infrastructure.

ING said the more targeted response from Israel leaves the door open for de-escalation and clearly the price action in oil this morning suggests the market is of the same view.

“While it is still unclear if or how Iran may retaliate, the government has downplayed the damage caused by Israel’s response”. The Iranian supreme leader has said that the attack should not be “exaggerated or downplayed”.

“Clearly, if we do see some de-escalation it would allow fundamentals once again to dictate price direction. And with a surplus market over 2025, this would mean that oil prices are likely to remain under pressure”, ING said.

The oil rig count in the US decreased by 2 last week, oilfield Services Company Baker Hughes data showed Friday.

The number of oil rigs, an indicator of short-term production in the country, fell to 480 for the week ending October 25.

The number of US oil rigs fell by 24 compared to one year ago. The price of international benchmark Brent crude stood at $75.55 per barrel at Friday’s trading close, while American benchmark West Texas Intermediate (WTI) was at $71.56 a barrel.