Oil prices dip as demand : concerns outweigh Middle East supply fears

Oil prices dip as demand

tvrfinnews.com

Oil prices dip as demand : Brent futures for June delivery slipped 7 cents, or 0.1%, to $89.16 a barrel by 0042 GMT, while U.S. crude futures for May delivery fell 10 cents, or 0.1%, to $85.26 a barrel.

Oil prices eased in early trade on Wednesday as worries about global demand due to weak economic momentum in China and fading hopes for U.S. interest rate cuts in the near term outweighed supply fears on heightened tensions in the Middle East.

Brent futures for June delivery slipped 7 cents, or 0.1%, to $89.16 a barrel by 0042 GMT, while U.S. crude futures for May delivery fell 10 cents, or 0.1%, to $85.26 a barrel. Oil prices dip as demand

Oil prices have softened so far this week as economic headwinds pressured investor sentiment, curbing gains from geopolitical tensions, with eyes on how Israel might respond to Iran’s attack on Israeli territory over the weekend.

“Demand concerns increased due to expectations that U.S. interest rate cuts are likely to be delayed and weaker-than-expected economic data from China,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities. Oil prices dip as demand

“Since the market had been rising until last week on supply worries amid escalating tensions in the Middle East, the relatively restrained Iranian aggression has not provided the ground for buying up,” he said. Oil prices dip as demand

He predicted WTI would trade around $83-$88 without any new developments.

The run of disappointing data showing stronger-than-expected inflation means the Federal Reserve will likely need more time than previously thought to be confident that inflation is on the path to 2%, Fed Chair Jerome Powell said. Oil prices dip as demand

In China, the world’s biggest oil importer, the economy grew faster than expected in the first quarter, but several March indicators, including property investment, retail sales and industrial output, showed that demand at home remains frail, weighing on overall momentum.

In the Middle East, a third meeting of Israel’s war cabinet set for Tuesday to decide on a response to Iran’s first-ever direct attack was put off until Wednesday, as Western allies eyed swift new sanctions against Tehran to help dissuade Israel from a major escalation. Oil prices dip as demand

Analysts said, however, Iran’s unprecedented missile and drone strike on Israel is unlikely to prompt dramatic sanctions action on Iran’s oil exports from the Biden administration due to worries about boosting oil prices and angering top buyer China. Oil prices dip as demand

Meanwhile, U.S. crude oil inventories rose last week more than expected by analysts polled by Reuters, however gasoline and distillates stockpiles fell, according to market sources citing American Petroleum Institute figures on Tuesday.

Official data from the Energy Information Administration, the statistical arm of the U.S. Department of Energy, is due on Wednesday at 10:30 a.m. (1430 GMT). Oil prices dip as demand

Oil prices are currently on a downward trend despite tensions in the Middle East. Here’s a deeper look at the news:

  • Demand Concerns Take Center Stage: Economic worries are dampening investor sentiment, leading to a decrease in oil demand expectations. This outweighs concerns about potential supply disruptions arising from the volatile Middle East.
  • Middle East Tensions Remain: The recent attack by Iran on Israel and the possibility of retaliation from Israel are keeping supply disruption anxieties alive. However, these anxieties haven’t been strong enough to overpower the pullback in demand.
  • Focus on Potential Response: The market is closely watching how Israel reacts to the Iranian attack. If the situation escalates significantly, it could disrupt oil supplies and push prices back up.
  • Background on Oil Price Decline: This downward trend is part of a larger movement that began earlier this year. Worries about a slowdown in China’s economy, the world’s biggest oil importer, coupled with increased oil supply from outside OPEC (Organization of the Petroleum Exporting Countries) are contributing factors. Oil prices dip as demand

In essence, the oil market is currently in a tug-of-war between potential supply constraints due to geopolitical tensions and overall weaker demand due to global economic anxieties. Oil prices dip as demand

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