Oil Prices Down Slightly As Economic Worries Weigh On Demand

The New Diplomat
Writer

Ad

Unknown Facts About Olufemi Oluyede, Waidi Shaibu, Other New Security Chiefs

By Abiola Olawale ​President Bola Tinubu's recent shake-up of the security architecture, which saw the appointment of General Olufemi Oluyede as the new Chief of Defence Staff (CDS) and Major-General Waidi Shaibu as the Chief of Army Staff (COAS), has dominated headlines. While their appointments signal a major shift in the nation's security strategy, many…

Tinubu Hails Nigeria’s Exit from FATF Grey List

By Abiola Olawale President Bola Ahmed Tinubu has hailed Nigeria’s formal removal from the Financial Action Task Force (FATF) list of jurisdictions under increased monitoring. This is as the President hailed the development as a "major milestone" and a "strategic victory" for the nation's financial integrity. ​The New Diplomat reports that FATF, a global financial…

Trump’s Sanctions Light a Fire Under Oil Prices

Oil markets roared back to life after Trump’s sanctions on Russia’s top oil producers sent prices surging. Trump’s sanctions on Russia’s top oil firms have cut short the past weeks’ downward pricing movement, with stories of record high crude on water, flattening backwardation curves and weakening Chinese SPR purchases now all put on the back…

Ad

By Tsvetana Paraskova 

  • Oil prices extend losses as demand concerns persist despite better-than-expected economic growth in China.
  • Refinery margins remain under pressure with weakness seen in middle distillates and gasoline cracks.
  • Rising bond yields and a stable US dollar continue to weigh down on commodity markets.

Oil prices extended last week’s losses and traded lower early on Monday, weighed down by lingering concerns about demand amid economic growth worries.

As of 7:08 a.m. EDT on Monday, the U.S. benchmark, WTI Crude, was trading down by 0.31% at $77.60. The international benchmark, Brent Crude, was down by 0.42% on the day at $81.30.

Oil continued the drop from last week, which was the first week in five to see a weekly decline in prices, as concerns about demand resurfaced despite data from China showing better-than-expected economic growth for the first quarter of the year.

Across oil markets, “refinery margins remain under pressure, largely a result of weakness in middle distillates. However, gasoline cracks have also started to see some weakness,” ING strategists Warren Patterson and Ewa Manthey said on Monday.

“The growth-sensitive commodities, such as copper and crude oil prices, fell due to risk-aversion sentiment as the weak US economic data and disappointing tech earnings sparked growth concerns,” Tina Teng, a market analyst at CMC Markets, wrote on Monday.

Rising bond yields and the stabilized U.S. dollar are also weighing down on commodity markets, Teng added.

A rising U.S. dollar makes crude oil more expensive for holders of other currencies.

“Crude oil prices traded lower in Asia overnight on a combination of technical factors, such as ongoing attempts to close the gaps down to $80 in Brent and $75.70 in WTI as well as long-liquidation from funds that bought futures contracts following the April 3 OPEC+ production cut announcement,” analysts at Saxo Bank said in a note today.

“The short-term fundamental outlook also continues to deteriorate with recession worries more than offsetting supply cuts as refinery margins remain under pressure across all the major trading hubs sending a warning sign about demand ahead of the peak consumption season,” they added. NB: Tsvetana Paraskova wrote this article for Oilprice.com

Ad

X whatsapp