Oil down on Monday

Oil prices dropped on Monday following their sharpest weekly increase in over a year, as concerns about oversupply and weakened demand outweighed fears that conflict in the Middle East might disrupt exports. Brent crude slipped by 0.4 per cent to $77.74 per barrel, while US West Texas Intermediate (WTI) fell 0.27 per cent to $74.18.

Last week, Brent surged over 8 per cent, and WTI climbed 9.1 per cent, driven by fears that Israeli retaliation for an Iranian missile strike could target Iran’s oil infrastructure. However, with no immediate escalation, investors began selling to lock in profits.

Analysts suggest technical profit-taking is behind the price dip. Yet, tensions remain high as Israel continues military actions against neighbouring countries, with the potential for further aggression to impact oil markets.

On the other hand, OPEC+ maintains substantial spare capacity to cushion against any significant disruptions, while production increases planned for December are expected to further stabilise the market.

Attribution: Reuters

Subediting: M. S. Salama