U.S. crude oil futures fell to around $74 per barrel on Tuesday, following a decline in the previous session. This drop is attributed to concerns over demand in Asia and ongoing cease-fire negotiations in the Middle East.
Francisco Blanch, a commodity strategist at Bank of America, discussed the market trend on CNBC’s “Fast Money” on Monday. He explained, “We are seeing oil prices revert due to increased supply and weaker demand.” Blanch added, “Oil prices are currently driven by supply and demand factors, with a temporary slowdown in China impacting the market.”
So far this quarter, U.S. crude and Brent prices have decreased by 9.2%.
Here is a summary of Tuesday’s closing energy prices:
West Texas Intermediate (WTI): The September contract closed at $74.04 per barrel, a drop of 33 cents or 0.44%. Year to date, U.S. crude oil has risen by 3.2%.
Brent Crude: The October contract ended at $77.20 per barrel, down 46 cents or 0.59%. This global benchmark is up slightly by 0.2% year to date.
RBOB Gasoline: The September contract was priced at $2.25 per gallon, down less than 1 cent or 0.33%. Gasoline has increased by 7.4% year to date.
Natural Gas: The September contract closed at $2.19 per thousand cubic feet, down more than 3 cents or 1.6%. Natural gas has fallen by 12.6% year to date.
In the Middle East, U.S. Secretary of State Antony Blinken is actively pursuing a cease-fire agreement in Gaza and efforts to secure the release of hostages held by Hamas. Blinken reported that Israeli Prime Minister Benjamin Netanyahu has accepted a proposed framework and urged Hamas to follow suit.
However, Hamas leader Yahya Sinwar views the cease-fire talks skeptically. He perceives them as a strategy to allow Israel more time for military action in Gaza, according to Arab mediators speaking to The Wall Street Journal. Hamas has claimed responsibility for a recent suicide bombing in Tel Aviv.
Oil prices have been affected by the current situation as Iran has not retaliated against Israel following the assassination of a Hamas leader in Tehran last month. The U.S. hopes that a cease-fire agreement in Gaza will prevent further escalation in the region.
Amena Bakr, senior researcher at Energy Intel, noted on CNBC’s “Capital Connection” that, “The market may be misjudging the geopolitical risks in the region.”