Oil prices fell to $80 as a result of a slowdown in global demand brought on by many economic worries. In response to declining demand and increasing supply from outside of OPEC, the oil market continued its sell-off on Monday, according to a report from ING commodities strategists.
After closing at $80.80 per barrel during the previous trading session, Brent crude fell to $80.60 per barrel, a 0.25% fall. West Texas Intermediate (WTI), the benchmark for the United States, was trading at $76.24 a barrel on Friday, down 0.33% from the previous day.
The strong US currency has forced lower demand by driving up energy costs. Investors are waiting for the publication of the PCE price index, the Fed’s favored inflation indicator, on Thursday.
Markets are also awaiting oil demand data from the US Energy Information Administration (EIA) to be released on Wednesday. US stockpiles showed an increase of around 3.5 million barrels last week; however, if stocks continue to rise, oil prices are expected to further decline.
Nevertheless, because of the associated supply risks, the unfolding geopolitical tension in the Middle East could still drive prices upward.
Yemen’s Houthi group said late Saturday that it would allow the British ship Rubymar sunk in the Gulf of Aden to be salvaged in exchange for bringing relief aid into the Gaza Strip. On Sunday, a Yemeni civilian was killed and six others injured in US and British attacks in the southern city of Taizz.
Weekly data from Baker Hughes shows that the US oil rigs rose by six rigs (the biggest weekly addition since February 2023) over the last week, with the total oil rig count standing at 503 for the week ended 23 February 2024, the highest rig count since the week ending 1 December 2023.
