(MENAFN- The Rio Times) On Wednesday, global oil markets witnessed a significant drop in oil prices, plunging over 3%.
This was primarily fueled by emerging concerns about weakened demand and the influence of peace negotiations between Israel and Hamas.
Additionally, a noticeable increase in U.S. oil inventories exacerbated the decline.
This occurred despite a decrease in trading volume due to the Labor Day holiday observed in various global markets.
West Texas Intermediate (WTI) crude for June delivery saw a decrease of 3.58%, dropping $2.93 to close at $79.00 per barrel at the New York Mercantile Exchange (Nymex).
Similarly, Brent crude for July delivery fell 3.35%, losing $2.89 to finish at $83.44 per barrel.
The U.S. Department of Energy reported a surprising 7.265 million barrel surge in oil stocks, defying expectations of a 1.5 million decrease.
This unexpected rise pushed WTI prices below the $80 mark for the first time since March.
Earlier in the day, market sentiment had already tilted downward, influenced by caution ahead of the Federal Reserve's decision on interest rates.
The Fed opted to maintain current rates and acknowledged minimal progress in combating inflation at the beginning of the year.
Market and Diplomatic Influences on Oil Prices
Razan Hilal from City Indez observed that a significant drop in U.S. consumer confidence on Tuesday impacted oil prices into Wednesday.
The bleak outlook on demand combined with anticipations of a restrictive Fed policy contributed to the downward trend.
In diplomatic arenas, U.S. Secretary of State Antony Blinken engaged with Israeli leaders to advance a ceasefire with Hamas.
He declared "the time is now" for sealing the deal, with Israel planning to dispatch delegates to Cairo to negotiate ceasefire terms.
In short, these diplomatic efforts are seen as additional factors that pull oil prices lower. This reflects how geopolitical developments can sway economic indicators globally.
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