Energy
Tuesday, April 9th, 2024 6:59 pm EDT
Key Points
- Oil prices fell after a rally, as traders locked in profits amid ongoing Middle East tensions.
- The decline is seen as a pause despite strong year for oil prices driven by geopolitical tensions, rising demand and production cuts. Analysts expect a supply deficit in 2024.
- Upside risks to oil prices remain due to potential escalation of conflicts in the Middle East, particularly between Israel and Iran. This could disrupt oil supply and further complicate inflation control efforts.
Oil prices fell on Tuesday after a two-day rally, as traders assessed the ongoing conflict in the Middle East. The price decline comes after some positive developments, such as Israel reducing its forces in Gaza, but tensions remain high.
The price of West Texas Intermediate (WTI) crude oil for May delivery fell 1.39% to $85.23 per barrel, while Brent crude oil for June delivery dropped 1.08% to $89.40 per barrel. Analysts believe this is a temporary pause after a strong year for oil prices, which have risen due to geopolitical tensions, rising demand, and production cuts by OPEC+. This trend is expected to continue throughout 2024, potentially leading to a supply deficit.
Despite the recent price dip, some analysts believe there’s still room for oil prices to rise due to the ongoing conflicts in the Middle East. A potential escalation, particularly between Israel and Iran, could disrupt oil supplies. Additionally, rising oil prices could further complicate the Federal Reserve’s efforts to control inflation. Investors will be closely monitoring inflation data this week to see how much oil prices have impacted consumer prices.
The recent price movement comes after a significant rally last week, triggered by tensions between Israel and Iran. The situation arose after a missile attack destroyed Iran’s consulate in Syria, which is believed to be carried out by Israel. While Iran has not directly retaliated, the potential for a wider conflict remains a concern.
Israeli Prime Minister Benjamin Netanyahu has indicated plans for a further offensive, despite warnings from the U.S. Meanwhile, ceasefire negotiations haven’t yielded any breakthroughs. The complex situation in the Middle East continues to be a major factor influencing the global oil market.
For the original article on CNBC, please click here: https://www.cnbc.com/2024/04/09/crude-oil-prices-today.html
