Apr 18 2024: Oil prices continued their downward trend on Thursday, following a 3% drop in the previous session, as attention shifted towards signs indicating a potential de-escalation of tensions in the crucial Middle East region, alongside ongoing concerns about demand.
Brent futures saw a decline of 63 cents, or 0.72%, reaching $86.66 per barrel, while U.S. West Texas Intermediate (WTI) crude futures dropped by 64 cents, or 0.77%, to $82.05 per barrel by 0947 GMT.
Investors are adjusting oil prices by factoring in reduced geopolitical risk following expectations that any Israeli response to Iran’s recent attack would be tempered by international pressure.
PVM analyst Tamas Varga noted, “It appears that the international pressure on Israel not to escalate tension with Iran will mercifully lead to a measured and moderate response to the weekend’s strikes.”
The easing of conflict between Iran and Israel is seen as reducing the potential for oil supply disruptions, with Brent prices returning to pre-attack levels, as highlighted by analyst Vandana Hari of Vanda Insights.
Additionally, concerns about global oil demand persist, with JP Morgan analysts reporting a 200,000 barrels per day (bpd) decline in worldwide oil consumption for April compared to forecasts, averaging 101 million bpd.
The surge in U.S. crude inventories also played a role in capping prices, as inventories rose by 2.7 million barrels to 460 million barrels in the week ending April 12, according to the Energy Information Administration.
Despite these factors, oil prices fell on Wednesday even after the U.S. announced it would not extend a license expiring on Thursday that had previously eased Venezuela oil sanctions.
