Apr 12, 2024 (MarketLine via COMTEX) --
There was a slight increase in crude oil prices overall during the week due to prospects of negotiations in the Gaza conflict. This was after Israel pulled back bulk of its forces from Gaza, raising the possibility of a potential ceasefire with Hamas. Nevertheless, tensions prevailed in the Middle East due to heightened tensions between Israel and Iran following the missile strike on the latteraEUR(TM)s consulate in Syria. Besides, rising US inflation and commercial crude stockpiles put additional pressure on oil prices during the week.
Some key factors that led to changes in crude oil prices this week are as follows:
Oil prices dipped on Monday and then slid further on Tuesday, weighed down by signs of de-escalation in geopolitical tensions in the Middle East. Amid growing humanitarian concerns, Israel announced the withdrawal of most of its military units from the Gaza strip. The country also continued with its discussions on a ceasefire and hostage exchange proposal with Hamas. Besides, Iran did not press ahead with any confrontation with Israel despite issuing a threat to do so last week, which further eased the tensions in the region and pressured prices down. Prices also declined due to reports that the OPEC+ group went slightly overboard on its crude production targets in March 2024, thus adding more supply to the global markets.
- Oil prices rose on Wednesday, supported by prospects of Israel-Iran tensions intensifying into an actual conflict. This was after Ayatollah Ali Khamenei, the Iranian head of state, emphasized the need for a response following the attack on the country’s consulate in Syria. It prompted the Jewish state to issue a cautionary statement, which hinted at a likely reaction if Iran initiated any direct attack from its mainland towards Israel. However, the upside to prices was somewhat contained by a large weekly crude inventory build in the US. As per the US Energy Information Administration (EIA), crude stockpiles in the country rose by 5.8 million barrels for the week ending on April 5, 2024.
- Oil prices declined on Thursday, weighed down by concerns over a rise in the US inflation, which could prevent easing of the country’s monetary policy. The US consumer price index (CPI) for March 2024 stood at 3.5% compared to the previous year, which was long way off from the Federal Reserve’s target of around 2%. High interest rates for an extended period could increase the debt burden on businesses in the country.
- Oil prices rose again on Friday, buoyed by US intelligence reports that Iran was preparing to launch retaliatory strikes on Israel in the coming days. It also issued warnings to its embassy personnel in Israel to not venture outside the cities of Tel Aviv, Jerusalem and Beersheba. Prices also received support from a decline in the US oil rig count by two units during the week ending on April 12, 2024. It implied that the country’s crude output might decline over the coming weeks.
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COMTEX_451053471/2227/2024-04-18T18:12:45
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