Oil Marginally Down as Economic Worries Outweigh Mideast Supply Fears

April 17, 2024
oil earnings

By Adedapo Adesanya 

The prices of the oil futures were marginally down on Tuesday after economic headwinds pressured investor sentiment, curbing gains from geopolitical tensions with eyes on Israel and its pending response to Iran’s attack over the weekend.

Brent crude futures for June delivery went down by 8 cents or 0.1 per cent to trade at $90.02 per barrel, and the US crude for May delivery fell by 5 cents or 0.1 per cent to end at $85.36 per barrel.

Speaking at an event held at The Wilson Center in Washington, US on Tuesday, the US Federal Reserve, Mr Jerome Powell, said the run of disappointing data from the world’s largest economy and oil producer showed stronger-than-expected inflation means the US central bank will likely need more time than previously thought to be confident that inflation is on the path to 2 per cent.

“The recent data have clearly not given us greater confidence, and instead indicate that it’s likely to take longer than expected to achieve that confidence,” Mr Powell said.

Concerns that Iran would respond to Israel’s April 1 strike on its embassy compound in Damascus has helped push oil but prices retreated on Monday after the Iranian counter-attack on Israel over the weekend proved less damaging than anticipated.

Analysts noted that so far, markets appear rather chill to the rising tensions, and cautiously optimistic that Israel’s response will be restrained and that an all-out war will be sidestepped.

Israel postponed its third war cabinet meeting to Wednesday as Western allies eyed swift new sanctions against Tehran to help dissuade Israel from a major escalation.

The US Treasury Secretary, Ms Janet Yellen, said the US intends to hit Iran with new sanctions in coming days due to its unprecedented attack on Israel, and that these actions could seek to reduce Iran’s capacity to export oil.

Iran produces more than 3 million barrels per day of crude oil as a major producer within the Organisation of the Petroleum Exporting Countries (OPEC).

Meanwhile, President Ebrahim Raisi said Iran will respond to any action against its interests after Israel warned it would respond to its drone and missile attack.

Meanwhile, US crude oil inventories rose by 4.1 million barrels last week while gasoline (petrol) and distillates stockpiles fell by 2.5 million and 427,000 barrels respectively, according to market sources citing American Petroleum Institute (API) figures.

Official data from the US Energy Information Administration (EIA) will be released later on Wednesday.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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