Oil prices experienced a significant drop on Tuesday due to easing concerns over potential supply disruptions and a forecasted surplus in the global oil market for the upcoming year. The International Energy Agency's prediction of a substantial surplus contributed to the decline in oil prices, with the price of Brent crude, the global benchmark, falling by over 5% to $73.5 per barrel. Similarly, West Texas Intermediate, the US oil benchmark, saw a decrease of more than 5% to $70 per barrel.
Israel's response to Iran's recent attack on October 1 has also been a point of interest, with reports suggesting that Israel may refrain from targeting Iranian nuclear and oil sites. While Israel has indicated it will consider US opinions, the final decision will be based on its national interests. US officials have expressed their preference for Israel not to target these sites.
The International Energy Agency highlighted the potential oversupply of oil in 2025, attributing it to abundant supply and weak demand in China, the largest oil importer globally. The agency emphasized the continuous flow of oil supply, particularly noting significant production increases in the US and other American countries.
In its report, the agency stated, 'Heightened oil supply security concerns are set against a backdrop of a global market that looks adequately supplied.' It further mentioned that unless a major disruption occurs, the market is expected to face a substantial surplus in the coming year.
