“Oil prices take a dive as global economic uncertainties take precedence over Middle East tensions, highlighting the delicate balance between supply dynamics and market sentiment.”
Oil prices continue to fall for the fourth consecutive day, driven by concerns about slowing European demand and the ongoing conflict between Israel and Hamas in Gaza. Euro zone business activity data suggests that the bloc may slip into recession, which has created a drag on the outlook for oil demand. Additionally, European oil refineries have been consuming less crude than last year due to lackluster economic growth. Efforts are being made to push for a ceasefire in Gaza to allow humanitarian aid to be delivered to Palestinians. However, the conflict still poses a risk to oil supply disruptions. Crude prices may receive some support from China, as its top parliament body has approved a bill to issue sovereign bonds and allow local governments to issue new debt to boost the economy. However, China has also put a ceiling on its oil refining capacity to streamline its oil processing sector and reduce carbon emissions. On a positive note, crude oil stockpiles in the US, the world’s biggest oil consumer, have fallen, which has supported prices. Gasoline and distillate inventories have also decreased.