On Tuesday, crude oil prices declined, resulting in its longest drop this year as a more significant pickup is expected by analysts.
West Texas Intermediate crude oil for June delivery dropped by -1.07% to $72.38 per barrel. Likewise, Brent oil futures for July shipments decreased by -1.10% to $76.16 a barrel on May 09’s Asian afternoon session.
According to some market watchers, continuous weeks of plunges in prices may soon come to pass. Analysts anticipate a more positive second and third quarter than the first quarter.
Moreover, a financial services company speculates that the oil slump will hit a pause. This came after beliefs that global demand would grow to 2.00 million barrels daily. As a result, the market would be under-supplying for 2023.
Also, experts forecasted that Brent would rise to $95.00 a barrel in December and $100.00 per barrel by April 2024.
Furthermore, oil prices are affected by economic concerns, causing them to slip. Last Wednesday, the US Federal Reserve had an interest rate hike by a quarter percentage point. This raised concerns from investors that weaker economic growth can negatively impact energy demand.
In addition, the sudden contraction in China’s April manufacturing activity caused doubts over demand recovery. Based on a statement from the Commonwealth Bank of Australia, oil markets will tighten due to the challenge in Chinese demand.
Wildfires Impacted Oil Production and Prices
A strong dollar discouraged buyers of dollar-indexed crude oil, while wildfires in Canada’s Alberta province affected prices.
On Saturday, Alberta declared a state of emergency since the disaster displaced almost 30,000 people. Also, it prompted energy producers to shut in around 280,000 barrels of oil, which is over 3.00% of Canada’s output.
According to analysts, some of these fires might continue for several months.
Besides, Canada is the fourth-largest crude oil producer globally; 80.00% comes from Alberta. Moreover, the wildfires mainly affected light oil and natural gas producers.
Furthermore, experts are maintaining their optimism for a safe and immediate resumption of production. Also, it would be good if volumes were impacted for a longer period.
