In the early Asia-Pacific market on Tuesday, October 15th, the price of American crude oil futures suddenly plummeted, with reports suggesting that Israel may avoid attacking Iran's crude oil infrastructure, easing concerns about the tense situation in the Middle East.

(Screenshot Source: Bloomberg)

After a 2.3% drop on Monday, the price of American crude oil futures WTI further declined, hitting a low of $71.39 per barrel.

(15-minute chart of American crude oil futures source: FX168)

Brent crude oil futures also plunged once to $74.796 per barrel.

(Brent crude oil futures 15-minute chart Source: FX168)

The Washington Post cited two informed officials as saying that Israeli Prime Minister Benjamin Netanyahu told the Biden administration that he is willing to strike Iran's military facilities, rather than oil or nuclear facilities.

Rohan Reddy, Head of Global X Management International Business Development and Corporate Strategy, said: 'The current market reaction may be a temporary cancellation or reduction of geopolitical risk premiums for oil.'

The Washington Post quoted American officials on Monday as saying that Washington sees this as a sign of Israeli restraint in retaliation for Iranian missile attacks. The US is concerned that if Israel attacks Iran's oil or nuclear facilities, it could trigger a larger-scale war.

(Screenshot Source: Bloomberg)

The Washington Post appears to now attribute this to a victory for Biden's foreign policy. The report said: 'This American official, describing the conversation between the two leaders, said that Netanyahu's attitude in this discussion was more moderate than before. Both officials said that Biden's decision to send a powerful missile defense system to Israel has clearly softened the Israeli Prime Minister's position.'

According to Reuters, on Monday Netanyahu denied that the Israeli military deliberately attacked the military base of the United Nations Interim Force in Lebanon, calling the accusations 'completely false' and once again calling for the UNIFIL forces to withdraw from the conflict zone. However, the UNIFIL forces have reiterated that they will not withdraw.

Netanyahu stated that while the Israeli military is targeting Hezbollah armed militants in Lebanon, they are making the greatest effort to avoid harming UN peacekeepers. However, the best way to ensure the safety of UN peacekeepers is for them to follow Israel's requests and temporarily stay away from danger.

In recent weeks, with the prospect of escalating conflicts in the Middle East drawing attention from traders, oil prices have been in a 'roller coaster' state. Israel has vowed to retaliate heavily against Iran's missile attack on October 1st.

Due to geopolitical threats affecting production in the Middle East region, the US WTI oil price has risen by about 5% so far this month. Oil supply from this region accounts for about one-third of global oil supply.

US crude oil futures suffered a setback on Monday when the Organization of the Petroleum Exporting Countries (OPEC) lowered its crude oil demand forecast for 2024 for the third time in a row, putting pressure on oil prices.

The West Texas Intermediate (WTI) crude oil futures for delivery in November on the New York Mercantile Exchange closed down $1.73, or 2.29%, at $73.83 a barrel on Monday.

OPEC released a report on Monday, reducing the global oil demand growth for 2024 from a daily increase of 2 million barrels to a daily increase of 1.9 million barrels. This marks the third consecutive time the organization has lowered its global oil demand expectations.