Apr 18, 2024 (MENAFN via COMTEX) --
(MENAFN - The Rio Times) On Wednesday, April 17, global oil markets experienced a sharp decline, with prices falling more than 3%.
This drop came in the wake of Iran's recent attack, after which Israel has yet to respond.
The absence of immediate retaliation has fueled speculation that the conflict may not escalate further at this time.
Additionally, concerns about a long-term tight monetary policy in the United States have heightened caution in economic circles, affecting market sentiments.
West Texas Intermediate (WTI) for May delivery saw a reduction of 3.12%, losing $2.67 to close at $82.69 per barrel on the New York Mercantile Exchange (Nymex ).
Similarly, Brent crude for June fell by 3.03%, decreasing by $2.72 to settle at $87.29 per barrel on the Intercontinental Exchange.
The geopolitical tension between Israel and Iran , especially following the recent attack on the Iranian consulate in Damascus, has kept the global community and market watchers on high alert.
These developments are particularly significant as they have the potential to influence oil prices worldwide.
Energy Market Dynamics and Economic Indicators
Rystad Energy, a noted energy consultancy, emphasized the delicate situation in the Middle East, suggesting that an expanded conflict could severely disrupt trade through the Strait of Hormuz.
Such a disruption could critically reduce the availability of oil and gas on the global market.
At the same time, Brent crude's prices are currently high, and analysts believe that additional risk premiums may soon be factored in as the regional situation develops.
Federal Reserve Chair Jerome Powell recently indicated that U.S. inflation data points to a slower than expected return to lower interest rates.
He noted a significant price reduction in late 2023 but acknowledged that early 2024 data showed insufficient progress toward the Fed's 2% inflation target.
Further complicating the economic landscape, U.S. crude oil inventories last week rose by 2.735 million barrels to 459.993 million barrels, surpassing expectations.
Analysts had predicted a smaller increase, highlighting the unpredictability of oil supply dynamics.
This inventory growth, reported by the Department of Energy, underscores the complex interplay between geopolitical developments and economic policies influencing the oil market.
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COMTEX_451024351/2604/2024-04-18T06:24:13
