Oil prices fall amid concerns about future supply surges, weak demand growth
(MENAFN) Oil prices continued their decline in early trading on Tuesday, extending the losses from the previous session, which saw prices drop to their lowest levels in four months. This decline reflects investor anxiety over the potential increase in oil supplies later in the year. brent crude futures decreased by 20 cents, or 0.3 percent, settling at USD78.16 per barrel. This follows Monday's significant drop of more than 3 percent, marking the first time Brent crude closed below USD80 since February 7. Similarly, U.S. West Texas Intermediate (WTI) crude futures fell by 17 cents, or 0.2 percent, to USD74.05 per barrel, nearing the four-month low it reached after a 3.6 percent fall the previous day.
The decline in oil prices comes in the wake of the OPEC+ alliance's decision on Sunday to extend most of its oil production cuts until 2025. This group, comprising the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, also indicated that the voluntary cuts by eight of its members could be gradually reversed starting in October. The possibility of these cuts being phased out has contributed to market concerns about future increases in oil supply.
In addition to supply-side worries, signs of weak demand growth have exerted further downward pressure on oil prices over recent months. Investors are particularly focused on U.S. fuel consumption data, which has shown signs of a slowdown. Reflecting this trend, the average price of gasoline in the United States dropped by 5.8 cents to USD3.50 per gallon on Monday, according to data. This combination of supply and demand factors continues to influence oil market dynamics, keeping prices under pressure.
MENAFN04062024000045015682ID1108293302
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.