Oil Falls 5% On Reduced Risk Of Wider Mideast War

Oil prices tumbled by around $4 a barrel on Monday after Israel's retaliatory strike against Iran's military on Saturday bypassed oil and nuclear facilities, avoiding disruption to energy supplies, Erwin Seba reported for Reuters.

Both Brent and U.S. West Texas Intermediate crude futures hit their lowest levels since Oct. 1 at the open.

Brent futures were down $4.20, or 5.52%, at $71.83 a barrel at 11:37 a.m. CDT (1637 GMT), while WTI U.S. crude futures lost $4.08, or 5.68%, to $67.70. Both Brent and U.S. West Texas Intermediate crude futures hit their lowest levels since Oct. 1 at the open.

"Obviously, this is a perfect example of a headline-driven market," said Phil Flynn, senior analyst at Price Futures Group. "We still have a lot of geopolitical risk."

The benchmarks gained 4% last week in volatile trading as markets reflected uncertainty over the looming U.S. election and the extent of Israel's expected response to the Iranian missile attack of Oct. 1.

Citi lowered its Brent price target for the next three months to $70 a barrel from $74, factoring in a lower risk premium in the near term, analysts led by Max Layton said in a note.