Oil prices decline marginally

25 Apr 2024 , 11:29 AM

Oil prices fell marginally today as tensions are showing signs of de-escalating in Middle East.

Early on Thursday, oil prices decreased as anxieties about the possibility of a slowdown in the US economy and the possibility of postponed interest rate cuts overwhelmed concerns about the possibility of escalating hostilities in the Middle East.

Both Brent and U.S. West Texas Intermediate crude futures saw a decrease of 9 cents, or 0.1%, to $86.95 and $82.74 a barrel, respectively. On Wednesday, the two benchmarks lost less than 1%.

Wednesday saw a second day of intense Israeli airstrikes against the northern Gaza Strip, upending weeks of relative quiet. Israel also declared that it was proceeding with preparations for a full-scale attack on the southern city of Rafah.

In the meantime, S&P Global said on Tuesday that its flash Composite PMI Output Index, which measures the manufacturing and services sectors, dropped to 50.9 this month from 52.1 in March, signalling a four-month low in U.S. business activity.

A slew of higher-than-expected inflation and employment data have alarmed the U.S. Federal Reserve, indicating that the effort to return inflation to the central bank's 2% goal rate has either paused or reversed.

Later this week, figures on the gross domestic product and personal consumption expenditures for March will be critical for the dollar and any attempt to predict the direction of U.S. interest rates.

According to data released on Wednesday by the Energy Information Administration (EIA), petrol stockpiles declined less than anticipated last week, but U.S. crude oil inventories unexpectedly dropped as exports increased.

According to the EIA, crude inventories fell by 6.4 million barrels to 453.6 million barrels during the week that ended on April 19. This was in contrast to a Reuters poll that predicted an increase of 825,000 barrels.

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