Continental Resources Executive Chairman Harold Hamm discussed the oil industry’s anticipation of the 2024 election results on “The Bottom Line.” On Monday, oil prices decreased by over 6% following Israel’s decision not to target Iran’s oil and nuclear facilities during its recent retaliatory strike.
Both Brent crude, the global benchmark, and West Texas Intermediate (WTI) futures fell more than 6% after the markets opened. Specifically, Brent decreased by 6.3% to $71.25 per barrel, and WTI dropped 6.7% to $67 per barrel—marking the lowest prices recorded in October.
These losses erased the more than 4% gains in oil benchmarks from the previous week, which were influenced by market concerns over the upcoming U.S. election and anticipated Israeli reactions to Iran’s ballistic missile strike on October 1.
Israeli military aircraft launched three waves of strikes on Iran early Saturday, targeting Iranian air defense systems, as well as missile, drone bases, and weapons production facilities.
Analysts remarked that the geopolitical risk premium factored into oil prices before Israel’s strikes diminished after it was clear the energy supplies remained unaffected. John Evans from oil broker PVM suggested that Israel’s response was significantly shaped by the Biden administration amid the forthcoming election.
Vivek Dhar, an analyst at Commonwealth Bank of Australia, expressed skepticism regarding any prompt de-escalation in the Middle East conflict. Dhar noted that despite Israel’s less aggressive approach towards Iran, doubts remain about the potential for a lasting ceasefire involving Iran’s proxies, Hamas, and Hezbollah.
Citi reduced its Brent price target for the next three months from $74 to $70 a barrel, incorporating a lower near-term risk premium, as noted by analysts led by Max Layton.
OPEC and its allies, collectively known as OPEC+, maintained their current oil output policy last month, including the plan to begin increasing output in December. The group is scheduled to meet on December 1, ahead of a full OPEC+ meeting.
Ashley Kelty, an analyst at Panmure Liberum, indicated that OPEC+ ministers’ forthcoming discussions on quota adjustments will significantly influence oil prices. Due to the soft economic outlook and high break-even prices for many cartel members, a delay in production increases has become more probable.
The report includes contributions from Reuters.