Oil prices extended losses Tuesday after a report said Israeli Prime Minister Benjamin Netanyahu had told US President Joe Biden he would not strike Iran’s crude or nuclear facilities in retaliation for a missile attack earlier this month.
The sell-off came as the commodity is hit by worries about China’s economic outlook after Beijing failed to announce any new stimulus at a weekend briefing, nor provide details on a raft of measures unveiled at the end of last month.
However, equity traders were broadly upbeat, pushing most Asian markets higher after another record close for the Dow and S&P 500 on Wall Street, with the third-quarter reporting season about to get under way.
Both main oil contracts dropped around three percent in early exchanges — having lost at least two percent Monday — after the Washington Post reported that Netanyahu had pledged to target Iran’s military rather than its crude and nuclear sector.
Investors have been on edge since Tehran launched a barrage of missiles at Israel at the start of the month, fuelling concerns of a response that could spark a region-wide conflict.
The commodity has swung wildly in recent weeks after Tel Aviv opened a new front against Hezbollah militants in Lebanon, while also continuing its battle against Hamas in Gaza.
Netanyahu on Monday vowed to hit Hezbollah without mercy, a day after the Iran-backed group’s deadliest strike on Israel since the start of their war in late September.
Adding to the downward pressure on oil is concern that China would struggle to reignite the world’s second-biggest economy after a much-anticipated news conference on Saturday left investors wanting.
