WionDrive News Desk 
In a significant market shift, oil prices experienced a sharp decline during Asian trading on Tuesday, reaching their lowest levels in nearly two weeks. The downturn, which saw prices fall by as much as $3 per barrel, is attributed to a combination of weakening demand outlook and diminishing concerns over potential supply disruptions from Iran.
As of 0640 GMT, Brent crude futures, the global oil benchmark, were trading at $74.65 per barrel, down $2.81 or 3.6%. Earlier in the session, Brent had touched $74.26, its lowest point since October 2. Similarly, U.S. West Texas Intermediate (WTI) futures fell $2.72, or 3.7%, to $71.11 per barrel, after briefly touching $70.75, the lowest since October 3.
This decline follows a 2% drop in both benchmarks on Monday, bringing the total loss for the week to nearly $5 per barrel. The sharp downturn has effectively erased the cumulative gains made over the previous seven sessions, during which investors had been factoring in potential supply risks due to Israel’s planned retaliation against Iran’s missile attack.
A report by the Washington Post late Monday contributed to easing tensions, stating that Israeli Prime Minister Benjamin Netanyahu had informed the United States of Israel’s willingness to target Iranian military installations while sparing nuclear and oil facilities. This news helped alleviate immediate concerns about disruptions to oil supply from the region.
Priyanka Sachdeva, senior market analyst at Phillip Nova, commented on the situation, saying, “Weakening demand has led to traders withdrawing the ‘war premium’ from prices. However, geopolitics still continues to support oil at this level. Without geopolitics in the equation, oil would have tumbled even more, maybe even below $70 per barrel mark amid the current weakening demand narrative.”
Adding to the bearish sentiment, the Organization of the Petroleum Exporting Countries (OPEC) revised its forecast for global oil demand growth in 2024 downward on Monday. The revision primarily reflects a reduction in expected demand from China, now projected to grow by 580,000 barrels per day (bpd) this year, down from the previous estimate of 650,000 bpd. OPEC also lowered its global oil demand growth projection for next year to 1.64 million bpd from 1.74 million bpd.
China’s customs data further underscored the demand concerns, showing a year-on-year decrease in September oil imports. This reduction is attributed to plants curbing purchases due to weak domestic fuel demand and narrowing export margins.
Independent market analyst Tina Teng offered additional insight, noting that while the demand outlook remains weak due to record-high U.S. production and soft Chinese demand, “oil retreated from the Middle East-tension-led surge as the market reaction may have been overdone.”
Despite the overall downward trend in oil prices, geopolitical tensions in the Middle East continue to simmer. Israel expanded its military operations against Hezbollah militants in Lebanon on Monday, with an airstrike in the north resulting in at least 21 fatalities.
