While the war in Gaza seems to have no respite and tensions in the Red Sea continue, analysts assure that the situation will not improve.
The crude oil pricesrose on Monday, as traders assessed the impact of the wars on middle East and Ukraine on oil supply and the economic headwinds that put pressure on global demand.
At mid-morning, the Brent gained 22 cents, at $78.78 a barrel, and the U.S. futures contract West Texas Intermediate in the United States for delivery in February – which expires on Monday – advanced 31 cents, to $73.72 a barrel, in lukewarm trading. The most active March WTI contract was up 26 cents at $73.51.
“This morning’s moderate reopening says a lot about the current sentiment in the crude oil marketdespite the continued geopolitical tensions in Europe and middle East“, said Tony Sycamoretraindg platform analyst, IG.
There are no signs of letting up in the Israeli offensive against Loop, while Houthi attacks on commercial ships in the Red Sea continue despite retaliatory measures by USA.
The situation served to strain the European and African crude oil markets and on Friday caused the contract premium to Brent one-month contract with respect to the six-month contract will reach its highest level since November, indicating a perception of lower supply for immediate delivery.
Meanwhile, the energy company russian Novatek reported on Monday that it was forced to suspend some operations at its fuel export terminal in Baltic Sea due to a fire.
IG’s Sycamore suggested oil fundamentals will continue to be a headwind for prices. Production is higher, while growth prospects in China and Europe are uneven at best, and this week’s GDP data is expected to show that the speed of the U.S. economy has slowed considerably, he noted.
“Investors want to be bullish, but tepid data and the caution of policymakers keep them reticent,” said Tamas Varga of brokerage PVM.
Source: Ambito
