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 fell 2% on Monday as the Organisation of the Petroleum Exporting Countries (OPEC) again lowered its outlook for 2024 and 2025 global oil demand growth and this led the international crude benchmark to fall to $77.

Brent crude futures settled $1.58, or 2%, lower at $77.46 per barrel and the US West Texas Intermediate (WTI) crude futures fell $1.73, or 2.29%, to $73.83 per barrel.

In its October monthly report, OPEC said world oil demand will rise by 1.93 million barrels per day in 2024, down from the growth of 2.03 million barrels per day expected last month.

This marked the third straight month that OPEC had reviewed the market downward after it kept the forecast unchanged since it was first made in July 2023.

China accounted for the bulk of the 2024 downgrade with the cartel trimming its Chinese growth forecast to 580,000 barrels per day from 650,000 barrels per day.

While government stimulus measures will support fourth-quarter demand, OPEC said oil use is facing headwinds from economic challenges and moves towards cleaner fuels.

The International Energy Agency (IEA), which represents industrialised countries, sees much lower demand growth than OPEC of 900,000 barrels per day in 2024. The IEA is scheduled to update its figures on Tuesday.

China’s stimulus plans failed to inspire investor confidence while markets kept watching for potential Israeli attacks on Iranian oil infrastructure.

China’s crude imports for the first nine months of the year fell nearly 3 per cent from last year to 10.99 million barrels per day.

Declining Chinese oil demand caused by the growing adoption of electric vehicles (EV), as well as slowing economic growth following the COVID-19 pandemic, has been a drag on global oil consumption and prices.

The news from China outweighed market concerns over the lingering possibility that an Israeli response to Iran’s October 1 missile attack could disrupt oil production.

The US has called on Israel to ensure its response to the attack does not create more problem, so it can avoid triggering a broader war in the Middle East.

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.