Energy
Wednesday, August 7th, 2024 2:57 pm EDT
Key Points
- Stock Market Impact: U.S. crude oil futures saw a rebound on Wednesday, driven by a recovery in the stock market after the S&P 500 and Dow Jones Industrial Average ended a three-day losing streak. This market recovery helped bolster oil prices, which had been under pressure due to recession fears.
- Energy Prices and Market Trends: On Wednesday, West Texas Intermediate (WTI) crude oil rose to $74.81 per barrel, and Brent crude increased to $78.12 per barrel. RBOB gasoline and natural gas also saw price increases. Despite these gains, natural gas prices remain down about 17% year-to-date.
- Geopolitical and Supply Factors: Oil prices are supported by ongoing production cuts by OPEC+ and escalating Middle East tensions. Specifically, fears of potential conflicts involving Iran and Israel have added volatility to the market. Goldman Sachs predicts Brent crude will maintain support around $75 per barrel due to resilient demand in the West and strong demand in India.
On Wednesday, U.S. crude oil futures rebounded as stock markets ended a three-day losing streak. Following a challenging period marked by recession fears, the S&P 500 and Dow Jones Industrial Average saw gains, with the S&P 500 rising 1% and the Dow Jones adding nearly 300 points. This recovery in equities provided a boost to the oil market, which had been pressured by concerns over an economic slowdown.
As of Wednesday, the West Texas Intermediate (WTI) crude oil for September delivery was priced at $74.81 per barrel, up $1.61, or 2.24%. Year-to-date, U.S. crude oil has increased approximately 4.5%. Brent crude for October delivery was up $1.64, or 2.14%, reaching $78.12 per barrel, with a year-to-date gain of 1.45%. RBOB gasoline also saw an increase, trading at $2.35 per gallon, up 2 cents, or 0.96%, with an 11.7% rise year-to-date. In contrast, natural gas for September delivery was at $2.08 per thousand cubic feet, up 7 cents, or 3.68%, although it has fallen about 17% year-to-date.
The oil market had been under pressure due to recession fears, but escalating tensions in the Middle East and ongoing production cuts by OPEC+ have helped stabilize prices. According to a Goldman Sachs note, Brent crude is expected to maintain a support level around $75 per barrel, bolstered by resilient oil demand in Western markets and solid demand in India.
Tensions in the Middle East have also played a role in the oil market dynamics. Israel is preparing for potential retaliatory actions following the assassination of Hamas leader Ismail Haniyeh in Tehran. The U.S. has responded by deploying military assets to the region and applying diplomatic pressure, which may be influencing Iran’s calculations regarding a major strike on Israel. This geopolitical uncertainty contributes to the oil market’s volatility and support levels.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/08/07/crude-oil-prices-today.html
