Oil futures contracts closed down more than 3% this Wednesday (17) as the adjustment after a recent jump gains more momentum.
A few days after Iran’s attack, Israel has not yet retaliated for the offensive, which raises expectations that the conflict will remain contained, at least for now.
Furthermore, the prospects of a tighter monetary policy for longer in the United States lead to caution regarding activity.
WTI for May closed down 3.12% (US$2.67), at US$82.69 a barrel, on the New York Mercantile Exchange (Nymex), and Brent for June fell 3.03% (US $2.72), at US$87.29 per barrel, on the Intercontinental Exchange.
Tensions between Israel and Iran have recently increased following an attack on the Iranian consulate in Damascus. This has attracted global attention, especially among market participants who closely monitor the potential impact on oil prices around the world.
“The geopolitical climate in the region is being closely watched, as a broader conflict could potentially disrupt trade flows through the Strait of Hormuz, which could remove significant quantities of gas and oil from the global market,” Rystad Energy points out. .
At this moment, “Brent prices are at higher levels, and it is likely that additional risk premiums will not yet be accounted for, as the situation is still evolving”, he assesses.
The president of the Federal Reserve (Fed), Jerome Powell, stated yesterday that recent inflation data in the United States indicates that it will take longer before the monetary authority has the confidence necessary to cut interest rates.
At an event, Powell highlighted the “significant” cooling in prices in the second half of 2023, but admitted that numbers from the beginning of the year pointed to a “lack of further progress” in the objective of returning inflation to the 2% target.
Just today, it was announced that United States oil stocks grew by 2.735 million barrels, to 459.993 million barrels, last week, according to the Department of Energy (DoE). Analysts interviewed by the Wall Street Journal predicted an increase of 600 thousand barrels.