Rising interest rates and the ongoing global economic slowdown have also impacted crude oil prices, despite the prospect of tighter supplies on OPEC+ supply cuts. Brent crude and US West Texas Intermediate crude were down on Monday, marking their first weekly drop in over a month.
Global crude oil prices have been witnessing a gradual drop over the past few months. (Photo: Reuters)
Global crude oil prices have been falling gradually over the past few months and the trend seems no signs of reversing anytime soon. Oil prices continued their downward trend on Monday due to a range of global factors that have clouded its demand outlook.
Rising interest rates and the ongoing global economic slowdown have also impacted crude oil prices, despite the prospect of tighter supplies on OPEC+ supply cuts. Brent crude and US West Texas Intermediate crude were down on Monday, marking their first weekly drop in over a month.
advertisem*nt
Oil prices have been hurt by the growing fears of a recession in the US, which is the top oil consumer in the world. Weak US economic data and weaker-than-expected corporate earnings from the tech sector have cast a shadow over future growth, leading to cautious sentiments about the commodity among investors.
CMC Markets analyst Tina Teng told news agency Reuters that the stabilisation of the US dollar and climbing bond yields are pressurizing commodity markets.
Also Read | Explained: Why cheap crude oil won’t reduce your petrol, diesel expenses
It may be noted that central banks around the globe are expected to raise interest rates in May in a bid to tackle high inflation. This could further impact demand for crude oil among major oil-importing nations.
Moreover, China’s edgy economic recovery after the Covid-19 has also clouded oil demand outlook, even as Chinese customers’ data showed on Friday that the world’s top crude importer brought in record volumes in March. China’s imports from top suppliers Russia and Saudi Arabia were more than 2 million barrels per day each.
John Driscoll, director of JTD Energy Services, told news agency Reuters that the recent correction in oil prices is due to mixed economic data and continued central bank intervention.
Meanwhile, analysts and traders remained bullish about China’s fuel demand recovery towards the second half of 2023 and as additional supply cuts planned by OPEC+ from May could tighten markets.
Analysts at the National Australia Bank expect China’s oil demand recovery to more than offset the slowdown in OECD demand in the near term, while sanctions and supply constraints add upside risks to prices. They said that Brent could rise to $92 per barrel by the end of the second quarter.
Also Read | India expects fuel demand to grow 4.7% in FY24
Published By:
Koustav Das
Published On:
Apr 24, 2023
--- ENDS ---
