Oil prices decline as MidEast supply worries fade, brent crude at $81.50/bbl
Oil prices experienced a decline, with the global benchmark Brent dropping below $82 per barrel, on Monday. This downward trend occurred as worries diminished about potential disruptions to supply due to conflicts in the Middle East.
Additionally, concerns about softened demand in China contributed to the bearish sentiment. Brent futures saw a decrease of 58 cents, settling at $81.50 per barrel at 1444 GMT, while U.S. West Texas Intermediate (WTI) slipped by 93 cents, or 1.2%, reaching $77.08.
Both benchmarks concluded the week with losses, influenced by bearish Chinese data indicating diminished demand in the world’s top crude importer. Brent saw a decline of 1.8%, though the contract has maintained above $80 a barrel for more than a month. Meanwhile, WTI ended 2.5% lower.
Also read: Explained | Why did OPEC+ members extend oil output cuts to mid-2024
What’s weighing on crude oil prices?
- China’s crude oil imports increased during the first two months of the year compared to the same period in 2023, although they were lower than in the previous months, according to data released on Thursday. This reflects a continuing trend of reduced purchases by the world’s largest buyer.
- Yemen’s Iran-aligned Houthis have been conducting attacks on ships in the Red Sea and Gulf of Aden since November, claiming it as a show of support for Palestinians during Israel’s conflict with Hamas.
- Over the weekend, U.S., French, and British forces intercepted dozens of drones in the Red Sea region after Houthis targeted the bulk carrier Propel Fortune and U.S. destroyers in the area, as reported by the U.S. military.
- U.S. job growth picked up pace in February, an increase in the unemployment rate and a slowdown in wage gains maintained the possibility of an anticipated June interest rate cut. The upcoming U.S. inflation data, scheduled for release on Tuesday, adds further uncertainty to the market sentiment.
- Earlier this month, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, commonly referred to as OPEC+, reached an agreement to prolong voluntary oil production reductions of 2.2 million barrels per day into the second quarter, addressing the supply side of the oil market.
(With inputs from Reuters)
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Published: 11 Mar 2024, 10:30 PM IST
