Oil Prices Dip After Recent Rally
by Andreas Exarheas
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
In a market analysis sent to Rigzone on Tuesday, Mazen Salhab, MENA Chief Market Strategist at BDSwiss, outlined that oil prices dipped today after a recent rally “as the market assessed the impact of geopolitical tensions and uncertainties surrounding Libyan oil production”.
“The recent surge was also driven by concerns over an escalation of the conflict in the Middle East following military clashes between Israel and Hezbollah in Lebanon,” Salhab said in the analysis.
“Political disputes in Libya could continue to threaten oil production. As one of Africa’s largest oil producers, any prolonged disruption in Libya could push oil prices upward,” he warned.
“Meanwhile, geopolitical tensions in Eastern Europe could also contribute to higher crude prices. Attacks on the region’s energy infrastructure and concerns over regional stability could leave traders more cautious,” he continued.
In the analysis, Salhab noted that, “despite concerns about demand, particularly from China, the risk of supply constraints from these regions may keep prices elevated in the near term”.
In a separate market analysis sent to Rigzone today, Rania Gule, a Senior Market Analyst at XS.com, highlighted that “Goldman Sachs … joined Morgan Stanley in lowering its Brent crude price forecast to $77.00 per barrel by 2025, as OPEC is likely to reverse its voluntary supply cuts”.
Gule stated in that analysis that, in her opinion, the market is still contemplating the next move by OPEC.
“Earlier this year, OPEC announced plans to increase production in the fourth quarter with the market recovery, but prices remain low,” Gule added.
“This has led to Saudi Arabia’s oil export sales falling to a three-year low of $17.7 billion in June. This might delay OPEC’s plans to support prices,” Gule continued.
A Rystad Energy oil macro update from Senior Rystad Analyst Svetlana Tretyakova, which was also sent to Rigzone on Tuesday, highlighted that Brent crude futures “surged above $80 per barrel on Monday … marking a third consecutive day of gains”.
“This rally was driven by escalating supply risks amid fears of a broader conflict in the Middle East following significant missile and drone exchanges between Israel and Hezbollah, in addition to production cuts in Libya,” the report noted.
“Expectations of a more accommodative U.S. monetary policy, spurred by Federal Reserve Chair Jerome Powell’s hints at a potential rate cut, further bolstered market sentiment,” it added.
“Even so, persistent concerns about slowing Chinese demand and ongoing ceasefire negotiations in Gaza linger,” the report warned.
The Rystad report stated that, in the coming weeks, Brent crude prices “will remain sensitive to the main factors that have dominated the price formation in the past few weeks”.
“They are – developments in the Middle East, shifts in Chinese demand, and U.S. macroeconomic updates,” it highlighted.
The Brent crude oil price rose from a close of $76.05 per barrel on August 21 to a close of $81.43 per barrel on August 26. At the time of writing, it is trading at $80.04 per barrel.
by Andreas Exarheas
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas