Oil Plunges Nearly 5% Intraday

Some analysts believe that the current rise in oil prices is based solely on expectations rather than actual supply disruptions, and the likelihood of Israel attacking Iran's oil infrastructure is slim.

Before the US market on Tuesday, oil prices fell nearly 5% at one point. The market is waiting for Israel's response to Iran's rocket attack last week. Iran's attack last week triggered a surge in oil prices, as people worried that a broader conflict might break out in the Middle East.

On Monday, both benchmark crude oils rose by more than 3%, reaching the highest level since late August, continuing the 8% increase from last week. This is the largest single-week increase in over a year, due to concerns that hostile actions might disrupt oil supplies in the Middle East.

However, on Tuesday, oil prices continued to decline during the US market session, both falling nearly 5%, with WTI crude oil breaking below $74 and Brent crude oil falling to around $77.

Gaurav Sharma, an independent oil analyst in London, pointed out, "In the short term, oil prices may continue to rise before the next action of Israel is clear, but the decline in Brent crude oil prices indicates that the rise in oil prices to $80-82 per barrel will encounter resistance, as the uncertainty of demand and the possibility of oversupply cannot be easily eliminated."

The rise in oil prices began with Iran's missile launch against Israel on October 1. Israel vowed to retaliate and stated that it is considering various options, with Iran's oil facilities being considered potential targets.

Tamas Varga of the oil brokerage PVM said, "The current rise in oil prices is based solely on expectations rather than actual supply disruptions, and this rise cannot continue. It is irresponsible to claim that Iran will be directly and ominously involved in the conflict. Currently, the threat of Israel attacking Iran's oil infrastructure has not materialized."

Some analysts have said that the likelihood of Israel attacking Iran's oil infrastructure is slim and have warned that if Israel focuses on other targets, oil prices may face considerable downward pressure.

In addition, investors have been worried that slow economic growth will suppress fuel demand in Asia.

In the United States, Hurricane "Milton" intensified into a Category 5 hurricane on its way to Florida, forcing at least one oil and gas platform in the Gulf of Mexico to close on Monday.Traders will also be paying attention to the latest U.S. crude oil inventory data. Analysts expect that for the week ending October 4th, the EIA crude oil inventories will increase by 1.925 million barrels.