SINGAPORE, April 22 Reuters Oil prices fell by more than 1 on Monday, as the market focus switched to fundamentals after Israel and Iran played down the risk of an escalation of hostilities following Israel39;s apparently small strike on Iran.

Brent futures fell 1.21, or 1.4, to 86.08 a barrel by 0655 GMT. The frontmonth U.S. West Texas Intermediate WTI crude contract for May , which expires on Monday, fell 97 cents, or 1.2, to 82.17 a barrel, while the more active June contract dropped 1.23 to 80.99 a barrel.

Brent crude prices failed to retain their initial surge, with broad expectations that geopolitical tensions between Israel and Iran may fizzle off given Iran39;s tamed response, said Yeap Jun Rong, market strategist at IG.

With that, markets continue to unwind the geopolitical risk premium tied to potential supply disruptions, which seems more unlikely at current point in time, he added.

Both benchmarks spiked more than 3 a barrel early on Friday, after explosions were heard in the Iranian city of Isfahan in what sources described as an Israeli attack. Gains were capped after Tehran played down the incident and said it did not plan to retaliate.

Yeap said rising U.S. crude stocks had added to the pressure to sell.

U.S. crude inventories rose by 2.7 million barrels, Energy Information Administration data showed last week, nearly double analysts39; expectations of a 1.4 million barrel rise.

Economic concerns again become a bearish factor of the crude market,…