Oil prices fell after a five-day rally as concerns about escalating Middle East conflicts were balanced by signs of weaker global demand. Brent crude dropped below $82 per barrel, reversing nearly 8% gains from the previous week. West Texas Intermediate was around $79. Despite increased fears that Iran might attack Israel soon, possibly this week, weak consumption signals led OPEC to lower its demand forecasts for this year and next.
Crude oil prices remain slightly up for the year, buoyed by OPEC+ production cuts and a rebound in stock markets from last week’s downturn. An updated outlook from the International Energy Agency is expected later today, and U.S. inflation data on Wednesday could provide insights into future monetary policy in the world’s largest oil consumer.
Yeap Jun Rong, a market strategist at IG Asia Pte, said, “Attention will be on upcoming U.S. inflation to gauge the Fed’s future policy moves.” He added that the risk of an economic slowdown, which could affect oil demand, has not been entirely ruled out.
Market indicators show underlying strength, with the gap between Brent’s two nearest contracts widening. This spread, now 92 cents per barrel, reflects a bullish backwardation pattern compared to 34 cents at the start of last week.