Oil dips on investor caution as market watches Middle East turmoil | Reuters
Oil prices eased on Tuesday after rallying more than 4% in the previous session, with traders cautious as they watched for potential supply disruptions amid military clashes between Israel and the Palestinian Islamist group Hamas.
Brent crude fell 36 cents to $87.79 a barrel by 0805 GMT, while U.S. West Texas Intermediate (WTI) crude eased 35 cents to $86.03 a barrel. Both benchmarks had fallen by more than $1 in earlier trading before recovering slightly.
Brent and WTI had surged more than $3.50 on Monday as the clashes raised fears that the conflict could spread beyond Gaza into the oil-rich region. Hamas launched the largest military assault on Israel in decades on Saturday, while fighting continued into the night on Monday as Israel retaliated with a wave of air strikes on Gaza.
"There is still plenty of uncertainty across markets following the attacks in Israel over the weekend," said ING analysts on Tuesday, adding that oil markets are now pricing in a risk premium.
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