WASHINGTON (dpa-AFX) - Oil prices fell nearly 5 percent on Tuesday to hit two-week lows and extend losses for a third straight session on the back of a weaker demand forecast from IEA and amid reports that Israel's planned retaliatory attack on Iran won't target nuclear or oil facilities.
Lingering concerns about weakening Chinese demand and a buoyant U.S. dollar also weighed on prices.
The U.S. dollar traded at an over two-month high against major currencies amid bets that the Federal Reserve will proceed with modest rate cuts in the near term.
Benchmark Brent crude futures plunged 4.6 percent to $73.88 a barrel in European trade, while WTI crude futures were down 4.8 percent at $70.28.
World markets face a surplus of more than 1 million barrels a day next year that will replenish inventories from their current low levels, the International Energy Agency said in a monthly report, citing swelling American production, weak Chinese oil demand and spare capacity in the OPEC+ alliance that is near record levels.
On the geopolitical front, U.S. media reported that Israel may avoid targeting Iran's crude infrastructure or nuclear facilities, easing immediate concerns about supply disruptions.
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