The oil price is sinking lower, with Brent crude now down over 5% at $71.95 per barrel. That means oil has now dropped by $10/barrel over the last three weeks, and is now at a fresh four-week low. As flagged in the introduction, traders are optimistic that tensions in the Middle East may ease now that Israel has retaliated against Iran – without hitting its energy infrastructure. Antonio Ernesto Di Giacomo, senior market analyst at XS.
com, says: Despite the tensions generated by this event, the impact was less severe than anticipated, immediately affecting the crude market. The Israeli attack, which avoided vital facilities such as nuclear and oil sites in Iran, significantly reduced the uncertainty that had reigned in the previous weeks. Despite Iran’s threat to retaliate, the fact that the attack avoided critical facilities managed to moderate concerns about a possible significant escalation in the conflict.