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Brent crude futures were down 30 cents, or 0.4%, at $81.13 a
barrel by 0819 GMT. U.S. West Texas Intermediate crude futures
dropped 40 cents, or 0.5%, to $77.02.
After the jump in oil prices on the back of geopolitical risk in
the Middle East and a production halt in Libya, market
participants are now holding back to assess further
developments, said IG market strategist Yeap Jun Rong.
The 7% rise in Brent and 7.6% rise in WTI in the previous three
sessions bucked a broader downtrend since hitting its 2024 peak
of $91.17 in April. The downturn was driven by concern over
global crude demand, particularly from China and through the
summer, which is typically a peak demand period.
In eastern Libya, oilfields responsible for almost all the
country's 1.17 million barrels per day (bpd) of crude output
will be closed and production and exports halted, the
eastern-based administration said on Monday, after a flare-up in
tensions over leadership of the country's central bank.
There was no confirmation from the internationally recognized
government in Tripoli or from National Oil Corp (NOC), which
controls the country's oil resources.
Oil has also been supported by escalation in conflict between
Israel and Iran-backed Hezbollah, with a major exchange of
missiles after the killing of a senior Hezbollah commander last
month.
"Markets remain on edge as skirmishes between Israel and
Hezbollah intensify," ANZ analysts said in a note.
A top U.S. general said on Monday that the danger of a broader
war had eased somewhat but that an Iran strike on Israel
remained a risk.
(Reporting by Paul Carsten in London, Colleen Howe in Beijing
and Emily Chow in SingaporeEditing by David Goodman)
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