Oil Prices Drop Over $1 Per Barrel As Demand Worries Outweigh Middle East Supply Risks

Oil prices fell over $1 per barrel on Tuesday as traders focused on demand but remained cautious over potential supply disruptions from Middle East conflicts.

Brent crude fell 91 cents to $87.24 per barrel, while WTI crude fell 85 cents to $85.53 per barrel. Both dropped over $1 earlier.

Prices surged Monday on worries that clashes between Israel and Hamas could spread and hurt supply.

While Israel produces little oil, markets worried conflict could impact Middle East supply and worsen the expected deficit.

U.S.-Venezuela talks progressed on potential sanctions relief to allow more foreign oil firms to take Venezuelan crude under conditions.