Global oil prices saw mixed trading in early Asia, with concerns over slowing Chinese demand counterbalanced by rising geopolitical tensions following a rebel overthrow of Syrian President Bashar al-Assad. Brent crude fell slightly, while WTI rose marginally, reflecting a complex interplay of supply and demand factors.
Brent crude oil prices have climbed above $74 per barrel following OPEC+’s decision to delay its planned production increase, citing persistent global economic challenges and a desire to avoid market oversupply. The move, coupled with heightened tensions in the Middle East, particularly Iran’s threats against Israel, has boosted oil prices, potentially setting the stage for further gains in the coming weeks.
US markets closed mixed on Friday, with the Nasdaq boosted by megacap tech stocks. Tesla’s positive outlook rekindled optimism, while Nvidia briefly surpassed Apple in market value. Meanwhile, oil prices plummeted on Monday, driven by reduced geopolitical concerns and potential OPEC+ delays. Asia markets opened the week strong, led by gains in Japan and China. European markets were mixed, with the STOXX 50 index up slightly.
Crude oil prices experienced a sharp decline on Monday after reports emerged that Israeli Prime Minister Benjamin Netanyahu informed the Biden administration of his intention to launch targeted military strikes against Iran. This news came alongside OPEC’s reduction of its global oil demand growth forecast, further contributing to the downward pressure on oil prices.
Oil prices fell over 2% on Monday after OPEC reduced its global oil demand growth estimate for the third consecutive month. The cartel’s downward revision, based on actual consumption data and weaker demand expectations for certain regions, contributed to the decline. Investor disappointment over the lack of concrete Chinese fiscal stimulus further impacted commodity markets, including oil.
Oil prices edged higher on Monday, fueled by escalating tensions in the Middle East. Increased Israeli attacks on Iranian-backed forces raised concerns about potential supply disruptions from the region, particularly from Iran, a major oil producer. While demand worries persist, the possibility of a wider conflict involving Iran is supporting prices.
US stock markets closed with a mixed performance, with the Nasdaq Composite gaining over 100 points, while the Dow Jones Industrial Average dipped slightly. Oil prices took a significant tumble, dropping over 4% due to a revised demand forecast from OPEC. Meanwhile, European markets closed lower and Asian markets closed mostly higher.
Risk aversion dominated Wall Street trading on Tuesday, sending stocks lower as investors anxiously awaited the presidential debate between Vice President Kamala Harris and former President Donald Trump. The energy and financial sectors experienced the most significant losses, with OPEC’s revised oil demand forecasts and increased capital requirements for large banks adding to the pressure. However, the bond market saw a surge in demand, with the Japanese yen also gaining ground.
Iraq, heavily reliant on oil revenue, faces a budget crunch in 2025 due to declining oil prices. Despite increasing the 2024 budget, the government is preparing for tighter financial discipline in the following year. The country is focusing on boosting non-oil revenue through better tax collection to mitigate the financial challenges.
Oil futures initially rose on Monday due to concerns over a potential hurricane impacting the U.S. Gulf Coast and ongoing supply disruptions in Libya. However, prices later fell as concerns over weak Chinese demand and global oversupply persisted. Despite the brief rebound, oil prices remain under pressure, with analysts predicting a continued downward trend in the near future.
