A decision by Israel not to strike Iran’s nuclear and oil sites triggered losses in the international crude oil market with Brent crude oil shedding $3.21, or 4.14 percent to $74.25 a barrel.

US West Texas Intermediate crude oil also lost $3.25, or 4.4 percent to close at $70.58 a barrel.

Mr Benjamin Netanyahu, Prime Minister of Israel told the US that Israel was willing to strike Iranian military targets and not nuclear or oil targets.

Last week, US President Joe Biden warned that an all-out war could break out if Israel under the leadership of Netanyahu does not limit its possible attack to Iran’s military units.

Sources familiar with the situation have said Israel has agreed to contain retaliation and leave out Iranian oil and nuclear facilities.

Other sources have said Israel’s strong man, Mr Netanyahu had said he favours attacks on the Islamic Republic’s military infrastructure in return for Iran’s October 1st ballistic missile attack on Israel.

Global oil demand will rise by 860,000 barrels per day this year, down 40,000 barrels per day (bpd) from the previous forecast, the International Energy Agency (IEA) said on Tuesday.

For 2025, it sees an expansion of 1 million bpd, about 50,000 bpd higher than expected last month.
China has for years driven global rises in oil consumption.

The Paris-based agency now expects Chinese demand to grow by 150,000 bpd in 2024, down 30,000 bpd from the previous forecast. Consumption dropped by 500,000 bpd in August compared to the same period last year.

Investors King reported that OPEC also reduced its forecast for 2024 global demand growth on Monday, but it is still projecting a much stronger expansion of 1.93 million bpd driven in part by a bigger contribution from China.

Market analysts also noted that OPEC and its allies, known as OPEC+, may change production plans for late this year. This may boost prices.

Oil prices settled lower on Friday with Brent crude oil futures settled down 36 cents, or 0.45%, at $79.04 a barrel, while the US West Texas Intermediate (WTI) crude futures settled down 29 cents, or 0.38%, to $75.56 per barrel.

Investors weighed factors such as possible supply disruptions in the Middle East and Hurricane Milton’s impact on fuel demand in Florida.

For the week, however, both benchmarks rose by more than 1 percent.

Market analysts warned that development over Israel continues to hold over the market even after weeks since Iran’s massive missile attack.

There are talks that if Israel destroys Iran’s oil and gas infrastructure, prices will rise.

Crude benchmarks spiked so far this month after Iran launched more than 180 missiles against Israel on October 1, raising the prospect of retaliation against Iranian oil facilities.

However, Israel has yet to respond.

US President Joe Biden has warned Israel against hitting oil facilities in Iran, one of the world’s biggest producers.

Iran has warned that any attack on its infrastructure would provoke an even stronger response, with analysts warning that it could resort to placing pressure on important transit chokepoints like the Strait of Hormuz.

For years, Iran has threatened to block the strategic Strait of Hormuz, through which around 20% of the world’s oil supply flows.

A major disruption to the flow of oil and gas from the Middle East would affect the Chinese economy, which has faced its own challenges.

China imports an estimated 1.5 million barrels of oil a day from Iran, accounting for 15% of its oil imports from the region.

Weather development in the US weighed on prices as Hurricane Milton blew through Florida, leading to petrol shortages as drivers stocked up ahead of the hurricane.

There are indications that the destruction could go on to dampen fuel consumption in the hurricane’s aftermath.

Florida is the third-largest petrol consumer in the US, but there are no refineries in the state, making it dependent on waterborne imports.

The price of major oil benchmarks jumped more than 3 percent on Thursday following increased fuel demand in the United States due to Hurricane Milton and Middle East supply risks.

Brent crude oil, against which Nigerian oil is priced, rose $2.82, or 3.7 percent to settle at $79.40 a barrel, while the US West Texas Intermediate (WTI) crude rose $2.61, or 3.6 percent, to settle at $75.85.

In the US, the world’s largest oil producer and consumer, Hurricane Milton hit Florida and knocked out power to more than 3.4 million homes and terminals.

Market analysts noted that the closures of several product terminals, delayed tanker truck deliveries and disrupted pipeline movement will likely be affecting supplies well into next week given broad based power outages.

This will serve as a positive news for the market as disruptions generally lend support.

Recall that crude benchmarks spiked earlier this month after Iran launched more than 180 missiles against Israel on October 1.

This raised the prospect of retaliation against Iranian oil facilities. Iran is backing several groups fighting Israel, including Hezbollah in Lebanon, Hamas in Gaza and the Houthis in Yemen.

However, since Israel is yet to respond, crude benchmarks have eased.

Despite this, investors remained wary, given that Israel has vowed to wait and strike at the best time.

Israel has continued to fight in Lebanon as it Reuters reported that a strike on central Beirut on Thursday night killed 11 people and wounded at least 48.

In Yemen, the Houthis said they targeted vessels in the Red Sea and Indian Ocean in solidarity with the Palestinians in the war between Israel and Hamas in the Gaza Strip.

Meanwhile, Gulf states are lobbying the US to stop Israel from attacking Iran’s oil sites because they are concerned their own oil facilities could come under fire from Iran’s allies if the conflict escalates.

Support came as investors express confidence that the Federal Reserve would cut interest rates in November after data showed an increase in weekly jobless claims and an annual rise in inflation that was the lowest since February 2021.

The US central bank started to lower interest rates in September after hiking rates aggressively in 2022 and 2023.