The decline in oil continues
Oil continued its decline on expectations that a ceasefire in the Middle East would reduce tensions and on signs of rising inflation, which put pressure on the outlook for US demand ahead of the Fed meeting.
Oil continued its decline on expectations that a more hawkish tone would be used at the Fed meeting and that tensions in the Middle East might decrease.
Brent oil was trading around $85 a barrel after losing 1 percent on Tuesday, while U.S. crude was above $81. Volumes were weak in Asian trade due to public holidays in countries such as China and Singapore.
In the Middle East, according to the Israeli state channel Kan News, Israel will consider participating in ceasefire talks if Hamas responds to the latest proposal made through international mediation for a temporary ceasefire and the release of hostages.
Crude oil is off to a bad start to May, following a shaky April when it rose to the highest level since October following Iran’s attack on Israel. Although OPEC+’s supply cuts support prices, uncertainty regarding US monetary policy and the softening in fuel markets, including diesel, stand out as factors that create downward pressure.
ANZ Banking Group Ltd. “The possibility of a cease-fire agreement between Israel and Hamas has eased concerns about an escalation of the conflict and possible disruptions to supply,” analysts Brian Martin and Daniel Hynes wrote in a note. “It is happening before the US driving season, where it increases significantly,” he said.
On the other hand, according to the American Petroleum Institute, US crude oil stocks increased by 4.9 million barrels last week. If confirmed by official data on Wednesday, this would be the fifth increase in 6 weeks.
Brent oil for July delivery decreased by 0.9 percent to $85.60 per barrel.
US crude oil for June delivery fell 1 percent to $81.15 per barrel.