Brent crude cools by nearly 2% after jittery week for oil market; here’s why
Upstox
2 min read • Updated: April 8, 2024, 9:22 AM
Summary
Oil Prices Today: The rates have slided below the $90 per barrel mark. At 00:53 hours GMT, Brent crude futures were valued at $89.47 a barrel, down by $1.70 or 1.9%. The U.S. West Texas Intermediate crude also dropped by 1.9%, and was hovering around $85.29 a barrel.
Prices of global crude benchmark Brent dropped by nearly 2%, after a jittery week for the oil market which had pushed the rates upwards. In the early trading hours of Monday, Brent declined by around $1 per barrel.
The rates fell below $90, days after the price mark was breached due to the escalating geopolitical tensions. At 00:53 hours GMT, Brent crude futures were valued at $89.47 a barrel, down by $1.70 or 1.9% as against the previous closing price.
The price of the U.S. West Texas Intermediate crude also dropped by 1.9%, and was hovering around $85.29 a barrel.
The decline in rates come in the backdrop of oil prices rising by 4% in the preceding week, driven primarily by the escalating geopolitical tensions in the Middle East and the Organisation of Petroleum Exporting Countries (OPEC) decision to maintain supply output cuts of 2.2 million barrels per day (bpd) till mid-2024.
Also Read: Why Iran-Israel tensions raised fears of ‘supercharged oil prices’, disruption in LNG flows
Why crude oil prices tumbled by nearly 2% now
Notably, oil prices had soared to a nearly six-month high last week in the aftermath of Iran warning Israel of retaliation following a suspected Israeli attack on its consulate in Syrian capital Damascus. The warning had stoked fears of the Gaza war turning into a wider conflict, leading to supply disruptions in the oil market.
However, the tensions have relatively subsided over the weekend as Iran did not retaliate yet, and the Jerusalem Post reported that Tehran has conveyed to Washington that it would hold off the attack if a ceasefire is reached in Gaza.
The arrival of a delegation representing Palestinian militant group Hamas in Cairo for ceasefire-related talks, as reported by Reuters, has further eased the tensions, analysts point out. According to Bloomberg, Israel has also withdrawn some troops from Gaza.
"It appears the catalyst (for the drop in oil prices) is Israel saying it has withdrawn all troops except one brigade from the Southern Gaza strip, likely in response to growing international pressure and to de-escalate tensions after it killed senior Iranian commanders in Syria last week," Reuters quoted IG market analyst Tony Sycamore as saying.