Oil prices have navigated a range of influences, leading to a stabilization above $88 a barrel. The previous session witnessed a rally fueled by an unexpected decline in U.S. crude stocks. However, this surge was partially offset by a downturn in business activity within the world’s largest oil consumer. Brent crude futures experienced a marginal decrease of 24 cents, or 0.27%, reaching $88.18 a barrel by 1024 GMT. Concurrently, U.S. West Texas Intermediate crude futures encountered a more significant loss of 33 cents, or 0.4%, settling at $83.03 a barrel. This setback erased some of Brent’s previous session gains of approximately 1.6%. During that session, market sentiment had been buoyed by a weaker U.S. dollar and reduced concerns over Middle East conflicts. Analysts at Goldman Sachs anticipate that a perceived de-escalation between Iran and Israel could lead to a potential reduction of $5-10 per barrel in geopolitical risk premiums over the coming months, setting a potential ceiling of $90 a barrel for Brent. Economic conditions have also played a role in market dynamics. U.S. business activity experienced a deceleration in April, reaching a four-month low. This slowdown has raised the likelihood of interest rate cuts by the Federal Reserve, a move that could stimulate economic growth and subsequently increase demand for oil. In addition to these macroeconomic factors, market participants are closely monitoring the ongoing Israel-Hamas conflict, with recent heavy shelling raising concerns. Sources indicate that Israel is preparing to potentially evacuate Rafah ahead of a planned assault on the city. As the market awaits further developments, traders eagerly anticipate the release of official data on oil and product stockpiles at 1430 GMT.
Oil Prices Fluctuate Amidst Surprising Crude Stock Changes and Economic Trends
