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Oil prices fall on uncertainty around Middle East and US election

Earlier in the session, both crude benchmarks were trading up over $1 a barrel

Published: Thu 24 Oct 2024, 10:11 PM

  • By
  • Reuters

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Oil prices fell by about 1 per cent in volatile trade on Thursday on worries that slow economic growth in Europe could reduce energy demand, as uncertainty around conflict in the Middle East kept traders on edge ahead of the US presidential election.

Brent futures fell 54 cents, or 0.7 per cent, to $74.42 a barrel by 11.48am EDT (1548 GMT), while US West Texas Intermediate (WTI) crude slipped 59 cents, or 0.8 per cent, to $70.18.

Earlier in the session, both crude benchmarks were trading up over $1 a barrel.

"(The) energy complex continues to zig and zag as Middle East risk premium expands and contracts almost daily," analysts at energy advisory firm Ritterbusch and Associates said in a note.

Since Iran fired missiles at Israel on October 1, Brent crude surged 8 per cent during the week ended October 4 on worries Israel would attack Iran's oil infrastructure. It fell 8 per cent during the week ended October 18 on reports Israel would not hit energy infrastructure, easing fears of supply disruptions.

Iran is a member of the Organization of the Petroleum Exporting Countries (OPEC) and produced about 4.0 million barrels per day (bpd) of oil in 2023, US Energy Information Administration (EIA) data showed.

Iran was on track to export around 1.5 million bpd in 2024, up from an estimated 1.4 million bpd in 2023, according to analysts and US government reports.

With the US presidential election, which could alter US Middle East and oil policy, fast approaching on November 5, President Joe Biden's administration continued to push for peace between Israel and Hezbollah and Hamas.

"(Former President Donald) Trump is leading over (Vice President Kamala) Harris based on current data from betting markets and Trump has proposed making the US a major oil supplier," said OANDA senior market analyst Kelvin Wong, adding that such a move could depress prices.

While betting markets put Trump ahead, other polls show the result is too close to call.

Demand worries

In Europe, Euro zone business activity stalled again this month, remaining in contractionary territory as demand from both home and abroad fell despite firms barely increasing their prices, a survey showed on Thursday.

In the UK, optimism among British firms has sunk, according to two surveys published on Thursday, six days before finance minister Rachel Reeves tries to chart a way between raising taxes and boosting growth in the new government's first budget.

In the US, new applications for US unemployment aid unexpectedly fell last week, but the number of people collecting benefits in mid-October was the highest in nearly three years, indicating it was becoming harder for those losing jobs to land new positions.

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