Oil prices fell on Monday after posting their steepest weekly rise in over a year last week as oversupply concerns amid softer demand countered the worries of a wider Middle East war disrupting exports in the key producing region.
Brent crude futures fell 31 cents, or 0.4%, to $77.74 per barrel by 0435 GMT. U.S. West Texas Intermediate crude futures slipped 20 cents, or 0.27%, to $74.18 per barrel.
Brent rose by over 8% last week, the biggest weekly gain since January 2023, while the WTI contract gained 9.1% week-on-week, the most since March 2023, on expectations that Israel could strike Iranian oil infrastructure in response to an Iranian missile attack on Israel on Oct. 1.
However, as the Israeli response is still developing, some investors likely sold futures to lock in their gains from the previous week’s rise.
“Technical profit-taking seems to be the most logical explanation”, said Priyanka Sachdeva, senior market analyst at Phillip Nova, on Monday’s softening in oil prices.
Still, oil markets are bound to experience tailwinds amid fears of Israel’s retaliation on Iran, as the potential mass-scale escalation of conflict in the Middle East has countered mounting demand-side pressures, Sachdeva said.
