Brent falls below $80 as oil rally pauses, traders await Israeli response to Iranian missile attack

By Isabel Wang

A rally in oil prices was taking a pause on Tuesday morning as traders awaited Israel's response to Iran's actions last week.

Oil futures popped by 3.7% on Monday, with Brent crude prices topping $80 a barrel to settle at their highest since late August.

Price moves

-- West Texas Intermediate crude CL00 for November delivery CL.1 CLX24 fell $1.63, or 2.1%, to $75.44 a barrel on the New York Mercantile Exchange.

-- December Brent crude BRN00 BRNZ24, the global benchmark, dropped by $1.67, or 2.1%, to $79.26 a barrel on ICE Futures Europe.

-- November gasoline RBX24 was off 1.5% to $2.12 a gallon, while November heating oil HOX24 was down 2.2% to $2.34 a gallon.

-- Natural gas for November delivery NGX24 fell 33 cents, leaving it nearly flat, at $2.74 per million British thermal units.

Market drivers

Oil prices on Tuesday were reversing some of the gains they made in the previous session after surging around 13% through Monday's close since Iran fired at least 180 ballistic missiles at Israel last week, raising fears that Israel might retaliate by hitting Iranian oil installations.

Adding to the concern is the dampening fuel demand from China amid disappointment that Beijing announced no further stimulus measures as investors returned from a weeklong holiday.

See: China's stock-market resurgence hits roadblock on lack of new stimulus measures

In the U.S., Hurricane Milton intensified into a Category 5 storm on its way to Florida. Reuters reported on Monday at least one oil and gas platform in the Gulf of Mexico was shut and Florida ports imposed restrictions on vessel navigation as the hurricane rapidly intensified. Milton is expected to make landfall on Wednesday evening.

-Isabel Wang

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10-08-24 0837ET

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