Oil continues to lose as tension in the Middle East eases, 20 APRIL

 Oil continues to lose as tension in the Middle East eases

Economy | 04/18/2024   Mawazine News – Baghdad  Oil prices fell, on Thursday, to their lowest level in three weeks, continuing their losses amid hopes for a decline in tension in the Middle East, which is one of the most important crude producing regions, while investors’ focus shifts to expectations of a decline in demand.

Brent crude futures fell only 60 cents, or 0.7 percent, to $86.69 per barrel, while US West Texas Intermediate crude futures fell 53 cents, or 0.6 percent, to $82.16 per barrel. Both declined for the fourth session in a row.

Prices fell by more than a dollar at their lowest levels during the session, and have also fallen by about four percent since the beginning of the week.

Investors are reducing the geopolitical risk premium on oil prices amid expectations that international pressure will succeed in curbing the severity of any Israeli response to the attack launched by Iran on April 13.

Ole Hvalby, commodity analyst at SEB Research, told Reuters that any new Western sanctions on Iran could be offset by increased production from other oil-producing countries, and their impact may be limited without Chinese cooperation.

According to Reuters data, Iran is the third largest crude producer in the Organization of the Petroleum Exporting Countries (OPEC), and a decline in the intensity of its conflict with Israel would reduce the possibility of supply disruption.

Analysts at JP Morgan highlighted in a note issued late Tuesday that global oil consumption since the beginning of April is 200,000 barrels per day less than expected, with an average of 101 million barrels per day.

The rise in US crude inventories also suppressed prices. The US Energy Information Administration said on Wednesday that crude oil inventories rose by 2.7 million barrels to 460 million barrels in the week ending April 12, compared to analysts’ expectations in a Reuters poll that inventories would increase by 1.4 million barrels.

Inventories rose with a decrease in refinery consumption at a time that usually witnesses an increase in refining activity in preparation for increased summer demand in the United States. https://www.mawazin.net/Details.aspx?jimare=246211