Crude rates today: Oil prices open lower after Iran's attack on Israel, Brent above $90 a barrel

Oil prices opened lower for trading in the Asian markets on Monday, April 15, following a tumultuous weekend in the Middle East where Iran fired around 300 drones and missiles toward Israel.

The Brent futures for June delivery was priced at $90.21 at 12:56 hours GMT, down 24 cents from the previous close. The U.S. West Texas Intermediate (WTI) futures for May delivery were trading at $85.28 at the same time, lower by 38 cents as compared to the last closing price.

The fall in crude rates, say analysts, is likely due to the market participants scaling back risk premiums. The much-anticipated Iranian strikes caused only a modest damage, and did not lead to any fatalities. Most of the missiles and drones were intercepted by Israel using its Iron Dome defence system.

In the past week, oil prices had climbed to a six-month high as the market feared the outbreak of a wider regional conflict if Iran attacked Israel. Tehran had vowed to “exact revenge” against Tel Aviv for attacking its consulate in Damascus, leading to the death of seven personnel. Israel neither confirmed nor denied its role in the attack on the consulate.

Will Brent cross $100 per barrel?

The probability of oil crossing $100 per barrel in the immediate future remains low, said analysts, pointing out that Iran has stated that it does not intend to further escalate the conflict.

"The Iranian retaliatory missile and drone attack on Israel yesterday morning appears sufficient in size to avenge the killing of Iranian military personnel in Syria without being damaging enough to trigger a further escalation in hostilities at this point," IG market analyst Tony Sycamore said in a client note.

However, the tensions prevail as Israel has warned of retaliation. Any Israeli attack on Iranian soil could lead to both the countries climbing the escalation ladder, experts said. The United States, the staunchest ally of Israel, has clarified that it would not support any offensive against Iran.

Apart from the tensions in the Middle East, the growth and inflation dynamics in China, Europe and the United States, along with the strategy enacted by the Oil Producing and Exporting Countries and their allies (OPEC+) will also weigh-in on the crude rates in the period to come.

The rates had climbed last week after the OPEC+ announced an extension in production cuts of up to 2.2 million barrels per day till June-end this year.

The uncertainty related to the interest rate cuts in the United States, where inflation numbers have been rising, also adds to the volatility of the crude market. According to Sycamore, the combination of the above factors indicates that “all the risks remain to the topside in crude oil towards $90”.

Notably, the projected oil demand for 2024 was slashed by the International Energy Agency (IEA) in the forecast released last week. The agency predicts an average consumption of 1.2 million barrels per day, down by 130,000 barrels as compared to its previous forecast.