Oil prices experienced a slight decline amid speculation that unexpectedly robust inflation figures might postpone reductions in high interest rates, which have been restraining global fuel demand growth.
Brent crude futures saw a decrease of 20 cents, marking a 0.3% drop to $81.42 per barrel by 1415 GMT. Similarly, U.S. West Texas Intermediate crude futures (WTI) declined by 13 cents, representing a 0.2% decrease, settling at $76.36.
This downward trend follows last week’s losses, with Brent experiencing a decline of approximately 2%, while WTI dropped by over 3%, influenced by indications suggesting that the U.S. Federal Reserve intends to maintain interest rates without immediate adjustments.
Since November, oil prices have fluctuated within the range of $70 to $90 per barrel. This fluctuation can be attributed to several factors, including increasing U.S. supply and apprehensions regarding subdued demand from China. These influences have counteracted the impact of supply cuts by the OPEC+ alliance, despite ongoing conflicts in regions like Ukraine and Gaza.
What’s weighed on crude oil prices?
-Jake Sullivan, White House national security adviser, informed CNN on Sunday that negotiators from the United States, Egypt, Qatar, and Israel have reached preliminary agreements on a hostage deal amidst the ongoing Israel-Hamas conflict in the Middle East. Talks held in Paris outlined the basic framework, although negotiations are ongoing.
-Goldman Sachs analysts noted a modest geopolitical risk premium of $2 per barrel on Brent crude due to attacks by Yemeni Houthis on ships in the Red Sea. Despite disruptions, they raised their summer peak price projection for oil to $87 per barrel, up from $85, citing larger-than-expected draws in stocks held by developed countries.
Also read: India, Asia gains as Houthi attacks and freight costs disrupt diesel imports to Europe
-While Goldman Sachs anticipates a 1.5 million barrels per day (bpd) increase in oil demand by 2024, they’ve adjusted their forecasts. They lowered projections for China but raised them for the United States and India.
(With inputs from Reuters)
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