Oil plunges as Israel said to plan more limited than expected strike against Iran

Crude oil prices plummet as much as 5% in Tuesday’s trading after Israeli Prime Minister Netanyahu told the Biden administration that he was willing to strike military rather than oil or nuclear facilities in Iran, and Israel would take U.S. opinion into consideration, according to a Washington Post report citing unnamed sources.

The slide follows Monday’s drop in oil prices that was attributed to concerns about a weaker demand outlook after China failed to provide details of a stimulus package to revive its economy and OPEC further trimmed its outlook for oil demand growth.

Meanwhile, the International Energy Agency lowered its forecast for this year’s oil demand growth for the third month in a row to 862K bbl/day from its prior view of 903K bbl/day, although growth estimates for 2025 were edged higher by 998K bbl/day compared to 954K bbl/day previously.

Global demand rose by 680K bbl/day in Q3, its slowest pace since Q4 2022 when China was in full lockdown, while Chinese demand contracted by 500K bbl/day Y/Y in August after declining by an average of 190K bbl/day since April, the IEA reported.

Front-month Nymex crude oil (CL1:COM) for November delivery -4.4% to $70.54/bbl, and front-month December Brent crude (CO1:COM) -4.2% to $74.21/bbl.

ETFs: (NYSEARCA:USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (USOI)

Energy stocks (NYSEARCA:XLE) show broad losses in Tuesday’s trading, including APA Corp. (APA) -4.9%, Diamondback Energy (FANG) -4.4%, Valero Energy (VLO) -3.3%, Halliburton (HAL) -3.2%, Occidental Petroleum (OXY) -3.1%, Devon Energy (DVN) -3%, Targa Resources (TRGP) -3%.