NEW YORK (Reuters) – Oil prices fell nearly 1% on Tuesday, yielding some recent gains as investors reconsidered the likelihood of immediate supply disruptions in the Middle East after the United States killed a key commander. Iranian military last week.
FILE PHOTO: FILE PHOTO: Grandpuits Oil Refinery southeast of Paris, France, February 29, 2016. REUTERS / Christian Hartmann / File Photo
The BrCO LCOc1 fell 64 cents, or 0.93%, to close at $ 68.27 a barrel. US West Texas Intermediate (WTI) CLc1 crude fell 57 cents, or 0.9%, to close at $ 62.70 per barrel.
Prices rose in the previous two sessions due to fears of mounting conflict and possible disruptions in the Middle East after a January 3 drone attack in Baghdad killed Qassem Soleimani, chief of Iran's elite Quds Force, and Iran. promised revenge. Brent reached its highest level since September, while WTI rose to its strongest since April.
"The expansion of the Iran-related geographic risk premium appears to be losing steam as the complex appears to be taking a wait and see attitude ahead of possible Iranian retaliation for last week's events," Jim Ritterbusch , president of trade consulting firm Ritterbusch and Associates, said in a statement.
Chevron Corp (CVX.N) Chief Executive Michael Wirth told CNBC that oil markets remain well-supplied despite recent escalating tensions.
"Fundamentally, supply and demand remain where they were before these incidents," Wirth said in the interview.
Consultancy Eurasia Group said Iran would likely focus on US military targets rather than energy.
"This does not mean that low-level harassment of commercial maritime transport or regional energy infrastructure will not continue, but these activities will not be severe," he added.
Still, the US Maritime Administration's website has renewed its warning about threats to Iran's US commercial ships and their representatives in and around the Gulf.
Prices have also fallen, despite increased compliance by the Organization of Petroleum Exporting Countries (OPEC) in meeting production quota limits designed to reduce supply.
OPEC members pumped 29.5 million barrels per day (bpd) last month, a drop of 50,000 bpd from the revised November figure, according to a survey published by Reuters on Monday.
US crude inventories fell 5.9 million barrels a week to 3-430 million in January, according to industry group data that the American Petroleum Institute showed on Tuesday. Analysts had expected a draw of 3.6 million barrels.
Official government data is expected to be released on Wednesday.
Additional reporting by Bozorgmehr Sharafedin and Alex Lawler in London and Florence Tan in Singapore; Editing by Lisa Shumaker and Alistair Bell
Our standards:The Thomson Reuters Trust Principles. . (tagsToTranslate) USA (t) GLOBAL (t) OIL (t) Energy markets (t) Western Europe (t) Crude oil (t) Energy (legacy) (t) Military conflicts (t) Market reports (t) Oil and Gas (TRBC) (t) Refined Products (t) Top News (t) Energy (TRBC) (t) Europe (t) Middle East (t) Commodity News (third parties) (t) United Kingdom (t) Reports ( t)) United States