It's still too early to rule out an escalation that does threaten global oil supply–Iran is a major producer, and if it gets cut off it would have repercussions.
Oil prices slumped on Monday as hopes emerged of easing escalations in the Middle East despite an Israeli strike against Iranian military targets over the weekend. Benchmark Brent crude fell over 4% as trading got underway for the week to US$72.60 a barrel.
Oil and natural gas market remains cautious as weak demand from China and steady USD weigh on global energy prices.
Oil prices slid on Monday after Israel's 'limited' missile strikes on Iran over the weekend. Futures for global crude benchmark Brent slid 4.34% to $72.75 a barrel, while U.S. West Texas Intermediate futures dropped 4.54% to $68.52 per barrel.
Oil was trading lower in the morning Asia session as markets digested the latest developments in the Middle East.
Crude oil futures fell Sunday, after widely-anticipated Israeli airstrikes against Iran did not hit crucial oil facilities.
Oil prices tumbled nearly $4 a barrel on Monday after Israel's retaliatory strike on Iran over the weekend bypassed Tehran's oil and nuclear infrastructure and did not disrupt energy supplies, easing geopolitical tensions in the Middle East.
Investors will also be focused on a slew of earnings reports this week, Friday's jobs report for October, and the election, which is just one week away.
Oil prices are expected to fall when trading resumes on Monday as Israel's retaliatory strike on Iran over the weekend bypassed Tehran's oil and nuclear infrastructure and did not disrupt energy supplies, analysts said.
Crude oil's outlook next week: Will rising supply fears from Israel-Iran conflict offset bearish U.S. inventories and slow demand?
Crude oil breaks above 50-day MA ($70.47) as Middle East tensions raise supply concerns. Israeli strikes in Lebanon fuel market uncertainty.
Israel launched air strikes against military targets in Iran on Saturday in its long anticipated retaliation for an Iranian missile attack on October 1st, but avoided hitting energy infrastructure or Iran's nuclear facilities, limiting the potential for volatility in financial or commodity markets when they reopen.