Oil prices dip as fears of further escalation abate after Iran attack

Live updates: Follow the latest on Israel-Gaza Oil prices fell on Monday following Iran’s attack on Israel at the weekend as traders speculated that the conflict would remain contained. Brent , the benchmark for two thirds of the world’s oil, was trading 0.94 per cent lower at $89.60 a barrel at 12.51pm UAE time. West Texas Intermediate, the gauge that tracks US crude, fell 1.11 per cent to $84.71 a barrel. Iran fired more than 300 drones and missiles at Israel on Saturday in retaliation for the killing of senior members of the Islamic Revolutionary Guard Corps in an air strike in Syria on April 1. It marked the first direct attack by Tehran on Israel rather than through proxies in Lebanon, Syria and elsewhere. Iran also seized a container ship with links to Israel in the Arabian Sea. Saturday's attack, while a significant escalation, caused little damage, reducing the likelihood of an Israeli response, according to some analysts. “Good news is Tehran called the operation a success and declared that it won’t take further action unless Israel responds,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. “Risk appetite is better this Monday morning than it was last Friday, when the world was bracing for the Iranian retaliation on Israel." Meanwhile, Middle East equities gained after starting on a lower note on Monday. The Abu Dhabi Securities Exchange was up 0.3 per cent at 12.52pm UAE time. Saudi Arabia’s Tadawul Stock Exchange gained nearly 1 per cent in early trading. The Dubai Financial Market (DFM) pared some losses from earlier in the session and was down 0.20 per cent. "The banking and real estate sectors [in the GCC] were strongly affected as investors gauged the risks involved while the energy sector could be exposed to the resulting volatility in oil prices," Joseph Dahrieh, managing principal at Tickmill, told The National. "However, stocks have recovered to a certain level as efforts to avert further escalation in the region continue. Stock markets could remain exposed to new volatility and potential losses if the situation exacerbates." Asian stocks declined in early trading as traders weighed the possibility of a fresh global conflict. Japan’s benchmark Nikkei 225 was down 0.74 per cent at 1.35pm UAE time, while South Korea’s Kospi shed 0.42 per cent. Hong Kong’s Hang Seng was down 0.72 per cent, although the Shanghai Composite Index was up more than 1 per cent. Israel’s shekel was up nearly 1.4 per cent against the US dollar as of 1.37pm UAE time on signs that Tel Aviv is complying with requests by allies not to hit back at Iran after Saturday's attack. The US Dollar Index – a measure of its value against a weighted basket of major currencies – was down 0.17 per cent at 105.86 after gaining nearly 4 per cent since the start of the year. Growing geopolitical tensions and the possibility of the US Federal Reserve delaying interest rate cuts have contributed to a stronger US dollar. “There seems to be an element of a slight relief rally because, so far at least, Israel’s Netanyahu appears to be following US President Joe Biden’s instruction not to retaliate and risk escalating the situation even further,” said Nigel Green, chief executive of deVere Group. “However, the situation remains highly volatile and investors who are serious about protecting and growing their capital cannot now just sit back and relax,” he said. Gold prices were hovering near record-high levels hit in the previous session as investors continued to seek safe-haven assets. Spot gold was up 0.21 per cent at $2,348.98 per ounce at 1.39pm after reaching an all-time high of $2,431.29 on Friday. The cryptocurrency market recouped some losses after experiencing a significant sell-off at the weekend. Bitcoin, which fell about 8 per cent on Saturday evening, was up 1.4 per cent at $66,692.70 at 1.40pm. Ethereum rose 3.1 per cent to $3,252.14.

Oil prices dip as fears of further escalation abate after Iran attack

Bitcoin gained after dropping sharply during the weekend