Oil prices are heading for their steepest weekly decline since June, as tensions in the Middle East appeared to ease after Iran announced the end of its military operations against Israel. Brent crude, the international benchmark, fell back from earlier highs to trade around $94.58 a barrel, up just 1.75% on the day after hitting $98 earlier.
The retreat followed comments from Iran's military command that it was halting offensive operations, prompting a sense of calm to return to financial markets. European stock indices recovered, with London's FTSE 100 closing marginally higher by 5 points at 10,373. The pan-European Stoxx 600 also turned positive.
Despite the daily gain, oil remains on course for a weekly loss, the worst since June. The earlier spike had been triggered by exchanges of fire between Israel and Iran, but de-escalation led to a rapid reversal. Market strategists noted that investors were conditioned to 'buy the dip' after Friday's sell-off.
Meanwhile, concerns over inflation persist as expensive crude could spill into the broader economy. US households have grown more worried about their finances, with a New York Fed survey showing 13.3% of Americans see their situation as 'much worse' than a year ago, the highest since July 2022.
