Oil slumps 5% as fears of attack on Iranian oil facilities ease

Oil drilling rigs

Oil deepened losses today, Oct. 8, after a report that an expected Israeli retaliatory strike against Iran would likely spare oil infrastructure and as markets assessed ceasefire talks in Lebanon.

Brent crude futures for December delivery fell 4.65%, or $3.75, to close at $77.18 a barrel.

WTI crude futures for November delivery fell 4.65%, or $3.57, to $73.57 a barrel.

The geopolitical risk premium has shrunk following a New York Times report that suggested the Israeli military would likely target Iranian military installations and sites linked to intelligence and command, rather than Iranian oil or nuclear infrastructure.

A meeting of Chinese authorities today also disappointed investors' hopes for a new stimulus package for the world's second-largest economy, which could keep Chinese oil demand at previously weak expectations.

The American Petroleum Institute's report on oil inventories is expected later today, and the US Energy Information Administration is scheduled to release official inventory data on Oct. 9, amid expectations of a two million barrel increase in crude inventories.