WTI and Brent Decline as Iran Signals Easing Tensions
by Bloomberg | Antonia Mufarech and Devika Krishna Kumar
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
Oil fell on a weak outlook for fuel demand and the potential for the conflict between Iran and Israel to de-escalate after its recent flare-up.
West Texas Intermediate slipped almost 1% to settle below $71 a barrel while Brent retreated to settle below $74 a barrel. WTI had gained 4.8% last week in its biggest weekly jump since February.
After days of Israel and Iran-backed Hezbollah trading rocket fire, Iranian President Masoud Pezeshkian said on Monday that his country is prepared to de-escalate tensions as long as it sees the same level of commitment on the other side. The overture is easing some concerns that the conflict will worsen, threatening oil output in a region that supplies about a third of the world’s barrels.
Crude is also down this quarter on concerns that demand from China and the US will weaken at the same time that output from non-OPEC nations rises, creating an oversupplied market. The outlook for fuel demand is worsening, turning hedge funds the most bearish on diesel on record. Technical factors also are providing headwinds after crude rallied about 10% from its 2024 lows reached earlier this month.
Oil Prices:
- WTI for November delivery fell 0.9% to settle at $70.37 a barrel.
- Brent for November settlement slid 0.8% to settle at $73.90 a barrel.
“Sentiment among energy investors has turned decisively bearish as OPEC+ now plans to add barrels into a surplus oil market,” Bank of America Corp. analysts including Francisco Blanch wrote in a note.
In China, the world’s top oil importer, authorities announced plans for financial regulators to provide a rare briefing on the economy as the country cut a short-term policy rate. That fueled speculation officials are preparing more efforts to revive growth.
Increased stimulus from China could improve demand for crude, said Robert Yawger, director of the energy futures division at Mizuho Securities USA.
It’s “tough for crude oil to rally for size without China demand growth,” Yawger said.
Meanwhile, from Mississippi to the Florida Panhandle, the US Gulf Coast is at risk of a hurricane strike by the end of the week as a patch of turbulent weather in the Atlantic becomes more organized. Ahead of the storm, Shell Plc has curtailed production at the Appomattox project and the Stones oil field in the Gulf, according to a company statement.
by Bloomberg | Antonia Mufarech and Devika Krishna Kumar
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas