Volatile course in oil
Oil experienced a sharp decline as demand softened and signs emerged that tensions in the Middle East would remain contained.
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U.S. crude oil remained steady above $82 after erasing all gains made since October 7 with a loss of nearly 4 percent on Monday. Global benchmark Brent was below $88. Although Prime Minister Benjamin Netanyahu has not ruled out the possibility of a ceasefire, the ground invasion of Gaza has not yet triggered a wider regional conflict that could put crude oil supplies at risk.
Crude oil is finishing a turbulent month as prices have been shaken by the war and mixed demand indicators. With the risk premium triggered by the conflict diminishing and concerns about a global slowdown coming to the fore again, both U.S. crude and Brent are on track to limit their October losses. Data from Asia highlighted risks as manufacturing in China began to contract again.
IG Asia Market Strategist Yeap Jun Rong said there are "expectations that the conflict can still be contained," which could limit the war risk premium. He added that Chinese data has revealed downside risks to economic conditions.