MON NOV 04 2024-theGBJournal|Brent Futures rose by $1.14 per barrel to $74.24 a barrel in early Monday trading after OPEC+ said on Sunday it would delay its planned December production hike in response to high supply and weak demand signals, particularly from China, the world’s largest oil importer.
The combination of geopolitical tensions, supply constraints, and economic signals has led analysts to expect heightened volatility in oil markets in early November.
The U.S West Texas Intermediate Crude also climbed $1.14 a barrel to $70.63 a barrel, sustain the surge seen last week following reports that Iran is preparing a potential attack on Israel from Iraqi territory, using drones and missiles, which could heighten regional instability and impact oil supplies ahead of the U.S. presidential election.
The geopolitical tension contributed to a 3% rise in both WTI and Brent crude prices, which initially rebounded from earlier losses last week as oil markets also faced uncertainty over OPEC+ production decisions and demand fluctuations.
Alongside this, oil prices were bolstered by recent U.S. government data showing a surprising decline in crude inventories by 0.5 million barrels, along with a larger-than-expected draw in gasoline stocks, suggesting steady demand in the world’s biggest fuel consumer even as winter approaches.
The easing U.S. inflation rate, which slowed to 2.1% annually in September, may also encourage the Federal Reserve to cut interest rates again, which could stimulate economic growth and further support oil demand.
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