Oil Prices Fall Below $90 a Barrel Due to Demand Concerns: What You Need to Know

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Oil prices fell in early trade on Wednesday, amid worries about global demand due to weak economic growth in China and hopes for a cut in US interest rates soon, outweighing supply concerns due to tightening a is increasing in the Middle East.
Brent crude futures for June delivery fell seven cents, or 0.1 percent, to $89.16 a barrel by 0042 GMT, while U.S. crude futures for May delivery fell 10 cents, or 0.1 percent, to $85.26 a barrel .
Oil prices have fallen since the start of the week as unfavorable economic conditions weighed on investor confidence, limiting gains due to geopolitical tensions amid expectations of Israel’s response to the attack launched by Iran at the beginning of the week.
“Demand concerns have risen amid expectations of a delay in US interest rate cuts and weaker-than-expected Chinese economic data,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
He said, “As the market rallied last week on supply concerns amid rising tensions in the Middle East, the limited Iranian aggression did not provide a basis for buying. “
He expected US West Texas Intermediate crude to trade in a range between $83 and $88 without any new developments.
Federal Reserve Chairman Jerome Powell said the string of disappointing data showing stronger-than-expected inflation means the Federal Reserve will likely need longer than previously thought to be confident that inflation is on its way to the 2 percent level.
In China, the world’s largest oil importer, the economy grew faster than expected in the first quarter, but several indicators in March, such as real estate investment, retail sales and industrial production, showed that demand at home still weak, affecting the overall momentum.
In the Middle East, Israel’s War Cabinet postponed until today its third meeting regarding a decision to respond to Iran’s first ever direct attack on Israel, while Western allies try to quickly impose new sanctions on Tehran with the goal. discouraging Israel from major escalation in the Middle East.
However, analysts predicted that the Iranian missile and drone attack on Israel would lead to tougher US sanctions on Iranian oil exports due to concerns about increasing prices. oil and angering China.
Meanwhile, market sources, citing figures from the American Petroleum Institute, said on Tuesday that US crude oil inventories rose more last week than analysts polled by Reuters had expected, but gasoline and distillate inventories fell.
Official data from the Energy Information Administration, the statistical arm of the US Department of Energy, is expected to be released on Wednesday.
(Reuters) –