Oil prices plunged to three-week lows as traders awaited industry reports to validate whether the recent decline justifies the actual data.
Brent crude traded below $8 per barrel, down 12% over the past three weeks on concerns about global demand and the easing of the risk premium associated with the Israel-Hamas conflict. West Texas Intermediate (WTI) hovered around $77.
Last week, oil prices saw a modest rebound after dipping below $80 for the first time since July. However, concerns about weakening demand from China, The US, and Europe persisted. Despite the Israel-Hamas conflict, which has not disrupted the Middle East oil supply (accounting for about one-third of the global supply) increased shipments from Russia and the US added to the oversupply.
Saudi Energy Minister Prince Abdulaziz Bin Salman blamed speculators having their role in the recent drop in oil prices. He claims that oil demand is healthy.
Analysts from ANZ group Holdings Ltd. Brain Martin and Daniel Hynes, highlighted the impact of this week’s oil market reports, stating, “Any signs of tightness may shift sentiment that has been weakened by easing geopolitical tensions.” OPEC’s monthly oil market report is due on Monday, followed by reports from the International Energy Agency and two week’s worth of US Inventory data.
Meanwhile, Iraqi Oil Minister Hayyan Abdul Ghani’s visit to the Kurdistan region focused on discussions about resuming oil exports via Ceyhan, Turkey. The pipeline, which has been halted since March due to a Turkey-Iraq dispute and earthquake damage, is crucial for oil transportation.
As an indication of new geopolitical tension, Israel airstrikes targeted the Hezbollah site in Lebanon. Meanwhile, Israeli and US officials have suggested intensifying talks to secure the release of Hamas-held hostages.
Overall, the outlook for oil prices remains uncertain as traders await industry reports and monitor geopolitical developments.
