Reuters/Angus Mordant :
Oil slipped on Friday after prices spiked earlier on reports that Israel had attacked Iran as market fears of a major escalation to hostilities in the Mideast appeared to ease.
After the benchmark contracts jumped more than $3 in the session, Brent futures were down 46 cents, or 0.5 per cent, at $86.65 a barrel by 1015 GMT. The most active US West Texas Intermediate contract was down 34 cents, or 0.4 per cent, to $82.39.
Israel launched an attack on Iranian soil on Friday, sources told Reuters. Iranian media reported explosions, but an Iranian official told Reuters those were caused by air defence systems. State media said three drones over the central city of Isfahan had been shot down.
Tehran played down the incident and indicated it had no plans for retaliation – a response that appeared gauged towards averting region-wide war.
“Whilst the initial spike in oil may have highlighted the initial fear of further escalation, we have seen both equities and crude reverse some of those preliminary moves,” said Joshua Mahony, chief market analyst at Scope Markets. The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County. “Events of the past week appear to be more about showing their willingness to act rather than actually seeking to incite a war …For markets this is a best case scenario”.
