Oil Dips From Three-Week High on Lingering Concerns Over Demand - Yahoo Finance
Oil Dips From Three-Week High on Lingering Concerns Over Demand
(Bloomberg) -- Oil slipped from the highest level in three weeks as lingering concerns over the demand outlook offset ongoing Middle East tensions.
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Brent crude fell below $83 a barrel after rallying almost 8% over the past two weeks, while West Texas Intermediate traded near $79. The International Energy Agency flagged last week that oil markets could be oversupplied all year, and China’s soft economy has raised questions about consumption.
Still, attacks on shipping in the Red Sea and the Israel-Hamas war are keeping prices from falling too far. And Israel said it will launch a ground offensive in the Rafah area of Gaza unless hostages are released before mid-March.
“For any oil price premium to be sustained in oil markets from Middle‑East tensions, physical oil supply needs to be disrupted,” said Vivek Dhar, an analyst at Commonwealth Bank of Australia. Brent futures are expected to give up their gains in coming weeks as concerns over supply mount, he added.
Bullish wagers for global benchmark Brent are at the highest since 2021 after the ratcheting up of geopolitical risks in the region, which accounts for around a third of the world’s crude production. Fuel markets, meanwhile, are in focus amid one of the most active trading periods for refined products in several years, as year-to-date price gains outstrip those for crude.
Chinese markets have reopened after the week-long Lunar New Year holiday, with crude in Shanghai climbing after the break.
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Related Knowledge Center: ENERGY BASICS: petroleum
While electric-powered vehicles may be the ride of the future, oil remains at least for now the dominant fuel for transportation around the world. And after a period of time at the end of the 20th century when oil was subject to wide fluctuations in price, new supplies in North America as a result of non-conventional recovery techniques have helped stabilize prices.