Oil down another 2% on Europe woes, Israel pause on Gaza ground assault
Investing.com — Investors who rushed into oil thinking it could be a hedge to the Israel-Hamas war are beginning to find out that black gold isn’t quite the haven as gold itself is reputed to be.
Crude prices tumbled another 2% Tuesday, adding to the previous session’s 3% rout, wiping out a chunk of the gains from the past two weeks derived from the Middle East’s latest conflict.
With an hour to settlement, New York-traded West Texas Intermediate, or WTI, crude for December delivery, was at $83.69 by 13:30 US Eastern Time (17:30 Greenwich Mean Time), down $1.80, or 2.1% on the day. On Monday, WTI fell 2.9%.
The US crude benchmark rose 2% last week and around 6% the prior week. Tuesday’s session low was $82.97, putting it not too far from the two-month low of $81.50 struck on Oct. 6, a day before the outbreak of fighting in Gaza.
UK-origin Brent crude for December delivery traded at $88.07, down $1.76, or nearly 2%. Brent fell 2.5% in the prior session.
Last week, the global crude benchmark rose 1.4%, adding to the prior week’s gain of 7.5%. Tuesday’s session low for Brent was $87.36.
Oil’s rally over the past two weeks was driven by global shock over the death toll emanating from Israel’s response to the Oct 7 attacks carried out by Hamas, and concerns of a contagion should the crisis spill over and impact neighboring countries, which include some of the biggest oil producers such as Saudi Arabia, the United Arab Emirates, Iraq and Kuwait.
Conversely, the market’s retreat comes amid diplomacy efforts by the United States and other world powers in convincing Israel to delay a ground assault on Gaza while they try and negotiate the release of an estimated 200 Israeli hostages being held by the Palestine militant group.
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