On Wednesday, oil prices dropped due to worries about global demand amid China’s economic slowdown and anticipated US commercial stock increases, despite Middle East tensions.
In the Asian afternoon session, Brent futures for June delivery dipped by 0.34% to $89.69 a barrel. Moreover, West Texas Intermediate (WTI) declined by 0.39% to $85.03 per barrel.
Furthermore, this week, oil prices have eased due to economic challenges dampening investor confidence, offsetting gains driven by geopolitical tensions, with attention on Israel’s potential response to Iran’s recent attack.
An expert observed that given oil’s susceptibility to geopolitical tensions. Recent days have witnessed cautious consolidation, awaiting Israel’s response to gauge the potential for broader regional conflict affecting crude availability.
The analyst added that the short-term decline in oil prices may indicate anticipation of contained tensions, with potential intervention from major crude producers like Saudi Arabia to alleviate any global supply disruptions.
Meanwhile, China, the largest oil importer globally, expanded the economy more than anticipated in the first quarter.
However, various March metrics, such as property investment, retail sales, and industrial output, indicated subdued domestic demand, dampening overall growth prospects.
According to market sources citing American Petroleum Institute data, US crude oil inventories surged last week, surpassing analysts’ expectations. Moreover, official figures from the Energy Information Administration are awaited due on Wednesday.
Iran’s Strike on Israel to Prompt Sanctions on Oil Exports
Analysts predict restrained sanctions on Iran’s oil exports in response to the recent attack on Israel.
The anticipated third meeting of Israel’s war cabinet, scheduled for Tuesday to discuss Iran’s unprecedented direct attack, was rescheduled for Wednesday.
Additionally, Western allies are contemplating imposing fresh sanctions against Tehran to prevent further escalation.
Meanwhile, the US might reimpose oil sanctions on Venezuela, potentially tightening global supplies and stabilizing prices.
Experts foresee WTI prices remaining confined within a narrow range of $83.20 to $87.70, influenced by factors like China’s sluggish retail sales and ongoing geopolitical tensions.
