Oil extends fall as risk tone counters more attacks on ships

(Bloomberg) — Oil fell for a second session as a risk-off tone in broader markets countered escalating attacks on ships near Yemen.

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Brent fell below $85 a barrel and West Texas Intermediate fell to $80. The drop came despite two ships being attacked, one being abandoned after flooding and another suffering moderate damage. A coal carrier was recently sunk as Houthi militants escalated hostilities in the region.

In broader markets, other commodities were lower and Asian shares fell, ahead of a week that includes inflation measures that will help guide interest rate bets. The dollar also held near its November high, making commodities more expensive.

Crude still remains on track for a monthly gain, and there are signs of rising US gasoline demand and healthy demand for air travel, helping the outlook. The spot spread for Brent has consolidated this month in a bullish downgrade structure, signaling a supply tightening.

In Iran, snap elections will be held on Friday following the death of Ebrahim Raisi in a helicopter crash last month. The vote comes at a time of heightened tensions between Iran and the West, with Tehran mobilizing a regional network of proxy militias to target Israel.

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