Oil prices edged lower on Tuesday with investor profit-taking after reaching the highest levels more than a month over growing supply disruption fears in the Middle East.
International benchmark Brent crude fell by 2% to $79.16 per barrel at 10.39 a.m. local time (0739 GMT), down from the previous session’s close of $80.80.
US benchmark West Texas Intermediate (WTI) declined by 2.18% to $75.14 per barrel after closing at $76.82 in the prior session.
Fighting in the Middle East, where most of the global oil reserves are located, intensified.
The Israeli army said Monday it deployed a new division for its ongoing ground operations in southern Lebanon.
Hezbollah, for its part, announced more artillery and rocket attacks against the army sites and groups of soldiers.
Meanwhile, the Israeli army on Tuesday morning claimed that it had killed a senior commander of Hezbollah group in an airstrike carried out in southern Beirut.
The rally in oil prices began following Iran’s launch of dozens of ballistic missiles at Israel on Oct. 1. Israeli Prime Minister Benjamin Netanyahu said Iran made a ‘big mistake’ and ‘will pay for it.’
While Iran’s oil facilities are considered a possible target for Israel, experts believe ‘a direct attack on Iran’s oil facilities is the least likely of Israel’s retaliation options.’
‘Any impact loss of supply can be covered by OPEC’s 7 million barrels per day of spare capacity,’ Daniel Hynes, a commodity strategist at the Australia and New Zealand Banking Group, said in an e-mail note.
On the demand side, investors have been concerned about slow growth dampening fuel demand in China.
On Tuesday, the country’s National Development and Reform Commission expressed its confidence in achieving full-year economic targets, pledging further support for growth but not announcing further stimulus.
