With demand concerns and a strong currency, oil drops 4% to its lowest level since July

 With demand concerns and a strong currency, oil drops 4% to its lowest level since July

For the first time since the assault on Israel on October 7 by Hamas Islamists, Brent oil prices fell below $84 per barrel. U.S. West Texas Intermediate oil futures concluded at $77.37 a barrel, down $3.45, or 4.3%, but the global benchmark finished at $81.61 a barrel, down $3.57, or 4.2%.

With the dollar strengthening and mixed Chinese economic data easing concerns about tight markets, oil prices plummeted more than 4% on Tuesday to their lowest level since late July.

For the first time since the assault on Israel on October 7 by Hamas Islamists, Brent oil prices fell below $84 per barrel. U.S. West Texas Intermediate oil futures concluded at $77.37 a barrel, down $3.45, or 4.3%, but the global benchmark finished at $81.61 a barrel, down $3.57, or 4.2%.

"Traders will remain on a state of emergency for signs of a wider confrontation emerging in the region that might interfere with supplies, but it seems these worries are subsiding," Craig Erlam, an OANDA analyst, said.

The pressure on oil prices was further increased, according to UBS analyst Giovanni Staunovo, by a resurgence in oil shipments from the Organization of Petroleum Exporting Countries.

The Middle East's seasonally decreased domestic demand has resulted in an increase in OPEC's oil exports of almost one million barrels per day (bpd) from their August low. It seems that there is too much supply for the countries that use oil to absorb," Staunovo said.

There was less anxiety about supply shortages as seen by the 2-1/2-month low premium on front-month loading Brent futures compared to those loading in six months.

China's demand for crude oil increased sharply in October, but the country's overall exports of products and services shrank more quickly than anticipated.

"The data signals the continuing decline in the Chinese economic picture driven by deteriorating consumption in the country's largest export the final destination: the West," Fiona Cincotta, an analyst with the City Index, said

Market sources said that U.S. crude oil stockpiles increased by about 12 million barrels last week, citing data from the American Petroleum Institute. Following settlement, oil prices continued their little decline, with Brent futures down to $81.51 at 5:02 p.m. ET.

The U.S. Energy Information Administration had previously predicted a rise of 100,000 bpd, but now projects a 300,000 bpd decline in the nation's overall petroleum consumption this year.

The U.S. dollar rose from recent lows due to waning investor optimism for a peak in global interest rates, increasing the cost of oil for holders of other currencies.

According to Neel Kashkari, president of the Minneapolis Federal Reserve, the U.S. central bank may need to take more steps to bring inflation down to its objective of 2%. Investors are waiting for Fed Chair Jerome Powell's remarks, which are expected on Wednesday and Thursday.

Robert Yawger, an analyst at Mizuho, said, "There are anxieties in the oil markets about both rising supply as well as sliding demand." "It's certainly not a tight economy right now," he said.