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oil prices worldwide
oil prices worldwide
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Big drop in oil prices worldwide.

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Oil prices worldwide fell again on Monday, with Brent crude dropping 0.4% to $81.27 per barrel and U.S. West Texas Intermediate (WTI) crude falling 0.5% to $76.14 per barrel.

This decline continues a trend from the previous week, driven by a stronger U.S. dollar. People are worried that higher inflation could delay cuts to U.S. interest rates, which might reduce global fuel demand.

Market sentiment, which was previously positive thanks to a rally led by Nvidia, is now turning more negative as expectations for higher interest rates boost the U.S. dollar. This puts pressure on commodity prices, according to Tina Teng, an analyst from Auckland.

Since November, oil prices have been fluctuating between $70 and $90 per barrel due to various reasons, including increased U.S. oil production and concerns about demand in China. Even though OPEC+ countries are adjusting their oil supply, geopolitical tensions are also playing a role.

ANZ analysts say there aren’t any new factors pushing oil prices, with positive factors like lower OPEC output and geopolitical risks balancing out concerns about Chinese demand.

Geopolitical tensions in the Middle East, like attacks on ships by Yemeni Houthis in the Red Sea, have added about $2 per barrel to Brent prices. Goldman Sachs analysts have adjusted their forecast for the highest price this summer to $87 per barrel because of disruptions in the Red Sea, which led to bigger-than-expected reductions in oil stocks in OECD countries.

Goldman Sachs expects global oil demand to grow by 1.5 million barrels per day in 2024. They’ve lowered their forecast for China’s demand but raised it for the U.S. and India. They say non-OPEC oil supply growth and strong global demand are both important.

Meanwhile, negotiations for a possible hostage deal involving the United States, Egypt, Qatar, and Israel are ongoing amid the Israel-Hamas conflict, but there are uncertainties, according to White House national security adviser Jake Sullivan.

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