Oil Prices at 8-Month Lows Amid U.S. Recession Concerns and Middle East Tensions.
Oil prices have hit eight-month lows, driven by concerns over a potential recession in the United States, despite ongoing tensions in the Middle East that could threaten supply from the region. Brent crude futures dipped slightly by 0.1% to $76.77 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 0.2% to $73.39 a barrel as of early Monday trading.
The market remains cautious due to the persistent conflict in Gaza and the broader Middle East. An Israeli airstrike recently killed at least 30 people in Gaza, further escalating the situation after the deaths of key leaders from Hamas and Hezbollah. There is a growing concern that if the conflict intensifies, it could disrupt crude exports from the region, which ANZ analysts warn could have significant implications for global oil supplies.
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Despite these geopolitical risks, oil prices have been under pressure due to fears of a U.S. recession. Last week, both Brent and WTI saw their fourth consecutive week of losses, the longest losing streak since November, with prices dropping over 3% to their lowest levels since January. This decline has been exacerbated by the decision of OPEC+ to stick to its plan of phasing out voluntary production cuts from October, a move that the market had hoped would be delayed.
Adding to the bearish sentiment, weak economic indicators globally, including disappointing job growth in the U.S. and sluggish factory activity in major economies like China and Europe, are contributing to concerns about declining fuel demand. In particular, slumping diesel consumption in China, a key driver of global oil demand, is weighing heavily on prices.
