Oil Prices Fall Below $80 Amidst Geopolitical Tensions
Oil prices declined in the global market Wednesday amid cease-fire talks in the Middle East and export halt in Libya and Russian airstrikes on energy infrastructure in Ukraine.
Oil prices slip, with Brent trading at $78.48 a barrel and WTI down 0.2% to $75.35 a barrel.
Geopolitical tensions continue to hang over the market, as Libya’s eastern government declares force majeure on all oil fields, terminals and facilities.
The exchange of fire over the weekend between Israel and Hezbollah still threatens to derail ceasefire negotiations, according to analysts.
Brent crude traded at $80.14 per barrel yesterday and US benchmark West Texas Intermediate was $77.17 per barrel.
For now, the market continues to try to balance these supply risks with the negative sentiment driven by demand concerns. Weaker Chinese demand has been on the radar for some time now and weaker-than-expected macro data from the US will only add to these demand concerns.
Tensions in the Middle East would have provided a boost, while LNG flows into Europe have been lower in recent months.
Oil had rallied following Fed Chair Powell’s Jackson Hole speech, which suggested that the Fed will cut rates in September. Developments in the Middle East over the weekend have provided further support to oil but Chinese demand remains slack.
European natural gas prices had a fairly volatile day yesterday, initially trading lower, but TTF managed to finish the day up 2.15%, according to ING commodities strategists note.
This is after Russia carried out attacks on Ukrainian energy infrastructure, which included gas compressor stations. The attacks do not appear to have had an impact on flows to Europe, ING said. #Oil Prices Fall Below $80 Amidst Geopolitical Tensions
