Oil drops more than 1% as investors recalibrate risk in Mideast
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Oil prices fell more than 1% on Tuesday as investors reconsidered the likelihood of Middle East supply disruptions in the wake of the US killing a top Iranian military commander.
Brent crude fell as much as 1.5% to $67.86 a barrel and was at $68.09, down 82 cents, at 0324 GMT. US West Texas Intermediate (WTI) crude futures was at $62.53, down 74 cents, after earlier dropping 1.5% to an intra-day low of $62.30.
Prices surged during the previous two sessions, with Brent reaching its highest since September while WTI rose to the most since April. The gains followed fears of escalating conflict and potential Middle East supply disruptions after the Jan. 3 drone strike in Baghdad that killed Iran's Qassem Soleimani. But, some analysts have tempered expectations for a widespread conflict.
Prices were also supported by higher compliance among the Organization of the Petroleum Exporting Countries (OPEC) on meeting production quota curbs aimed at reducing supply.
OPEC members pumped 29.50 million barrels per day (bpd) last month, down 50,000 bpd from November's revised figure, according to a Reuters survey.
US crude oil stockpiles likely dropped last week for a fourth week in a row as exports ramped up, a Reuters poll showed on Monday.
Six analysts estimated, on average, that crude stocks fell by 4.1 million barrels in the week to Jan 3.