HomeMarketsOILOil Prices Waver Amid Middle East Tensions and Bearish Indicators

Oil Prices Waver Amid Middle East Tensions and Bearish Indicators

Oil prices waver amid Middle East tensions and bearish signals, balancing geopolitical risks and market caution.

In the volatile world of oil markets, prices showed signs of retreat in early Asian trading on Wednesday, reversing gains from the previous session that were fueled by escalating tensions in the Middle East. The March Brent crude futures, set to expire, dipped 37 cents to $82.50 a barrel, while the more actively-traded April contract fell 24 cents to $82.26 a barrel. U.S. West Texas Intermediate crude also saw a minor decline of 18 cents to $77.64.

Despite the recent turmoil in the Middle East, the technical outlook for crude oil remains bearish, according to market analyst Tony Sycamore from IG. He highlighted that recent events, including a deadly drone attack on U.S. troops near the Jordan-Syria border, have not fully impacted the technical picture in the oil market. Sycamore emphasized the cautious sentiment prevailing among investors.

However, ANZ analysts offered a different perspective, noting that a substantial military response from the U.S. to the recent drone attack could still trigger a strong reaction in the market. President Biden, while indicating that he has decided on a response, emphasized his desire to avoid a broader war in the Middle East.

In a potentially positive development, the Iran-aligned Iraqi armed group Kataib Hezbollah, suspected by the U.S. Pentagon to be behind the recent attacks, announced the suspension of all its military operations against U.S. troops in the region. Meanwhile, in the Israel-Palestinian conflict, Hamas stated that it is studying a ceasefire proposal, signaling a potential diplomatic move amid the ongoing tensions.

Despite these developments, concerns linger in the market. Analysts are worried that even if a ceasefire is achieved in Gaza, it may not necessarily curb attacks by Iran-backed Houthis on ships in the Red Sea. Such attacks have already disrupted global shipping and oil trading, adding to the uncertainty in the oil market.

Several bearish factors are contributing to the market’s unease. The deepening crisis in China’s real estate sector, particularly the liquidation of property giant China Evergrande Group, raises concerns about demand from the world’s largest crude importer. Additionally, the upcoming release of China’s PMI data on Wednesday is anticipated to reveal a contraction for the fourth consecutive month, further dampening market sentiment.

In conclusion, while geopolitical tensions in the Middle East have injected volatility into oil prices, the market remains cautious, closely monitoring both global events and bearish indicators that could impact the trajectory of oil prices in the coming days.

News Desk
News Deskhttps://businessheadline.in
Business Headline aims at providing you with all the insights around the business world along with creative write-ups and reviews by renowned global personalities. Additionally the Business Blog will help startups and enterprises to develop their business.
- Advertisment -


- Advertisment -

Most Popular