New York — Oil prices fell by about 1% in volatile trade on Thursday on worries that slow economic growth in Europe could reduce energy demand, as uncertainty around conflict in the Middle East kept traders on edge ahead of the U.S. presidential election.
Brent futures fell 54 cents, or 0.7%, to $74.42 a barrel by 11:48 a.m. EDT (1548 GMT), while U.S. West Texas Intermediate (WTI) crude slipped 59 cents, or 0.8%, to $70.18.
Earlier in the session, both crude benchmarks were trading up over $1 a barrel.
“(The) energy complex continues to zig and zag as Middle East risk premium expands and contracts almost daily,” analysts at energy advisory firm Ritterbusch and Associates said in a note.
Since Iran fired missiles at Israel on Oct. 1, Brent crude surged 8% during the week ended Oct. 4 on worries Israel would attack Iran’s oil infrastructure. It fell 8% during the week ended Oct. 18 on reports Israel would not hit energy infrastructure, easing fears of supply disruptions.
Iran is a member of the Organization of the Petroleum Exporting Countries (OPEC) and produced about 4.0 million barrels per day (bpd) of oil in 2023, U.S. Energy Information Administration (EIA) data showed.
Iran was on track to export around 1.5 million bpd in 2024, up from an estimated 1.4 million bpd in 2023, according to analysts and U.S. government reports.
Iran backs several groups fighting Israel, including Hezbollah in Lebanon, Hamas in Gaza and the Houthis in Yemen.
With the U.S. presidential election, which could alter U.S. Middle East and oil policy, fast approaching on Nov. 5, President Joe Biden’s administration continued to push for peace between Israel and Hezbollah and Hamas.
“(Former President Donald) Trump is leading over (Vice President Kamala) Harris based on current data from betting markets and Trump has proposed making the U.S. a major oil supplier,” said OANDA senior market analyst Kelvin Wong, adding that such a move could depress prices.
While betting markets put Trump ahead, other polls show the result is too close to call.
DEMAND WORRIES
In Europe, Euro zone business activity stalled again this month, remaining in contractionary territory as demand from both home and abroad fell despite firms barely increasing their prices, a survey showed on Thursday.
In the UK, optimism among British firms has sunk, according to two surveys published on Thursday, six days before finance minister Rachel Reeves tries to chart a way between raising taxes and boosting growth in the new government’s first budget.
In the U.S., new applications for U.S. unemployment aid unexpectedly fell last week, but the number of people collecting benefits in mid-October was the highest in nearly three years, indicating it was becoming harder for those losing jobs to land new positions.
*Scott DiSavino, Paul Carsten, Arathy Somasekhar & Trixie Yap; editing: David Goodman, Elaine Hardcastle & Susan Fenton – Reuters
