Oil prices fall as tensions between Iran and Israel ease

Oil prices experienced a decline on Monday, influenced by a renewed focus on market fundamentals, as Israel and Iran downplayed the potential escalation of hostilities in the Middle East following a limited Israeli strike on Iran.

Brent crude futures dipped by 67 cents, or 0.77 percent, to $86.62 per barrel as of 0415 GMT.

The May contract for US West Texas Intermediate crude, set to expire on Monday, saw a decrease of 63 cents, or 0.76 percent, settling at $82.51 per barrel. Meanwhile, the most active June contract dropped by 64 cents to $81.58 per barrel.

Earlier in Friday’s trading, both benchmarks had surged by over three dollars per barrel following reports of explosions in the Iranian city of Isfahan, attributed to an Israeli attack. However, Tehran’s downplaying of the incident and its assurance of no retaliatory action tempered the gains.

The unexpected rise in US crude inventories further dampened market sentiment. According to data from the Energy Information Administration last week, US crude inventories surged by 2.7 million barrels, nearly double analysts’ expectations.