Mumbai, 22 April (CommoditiesControl): Oil prices experienced a downward trend on Monday amidst a renewed focus on market fundamentals, spurred by diminishing tensions between Iran and Israel in the Middle East. Brent futures witnessed a decline of 0.98% to $86.30 per barrel, while the WTI crude fell 0.93% to $81.30 per barrel.
The dip in oil prices follows Israel's purportedly limited strike on Iran, which was met with a restrained response from Iran, dampening fears of escalating hostilities in the region. Analysts note a reduction in the geopolitical risk premium associated with potential supply disruptions, resulting in a shift in market sentiment.
Moreover, concerns about oversupply were further compounded by higher-than-expected U.S. crude inventories, which rose by 2.7 million barrels according to Energy Information Administration data. This figure nearly doubled analysts' expectations of a 1.4 million barrel increase, contributing to downward pressure on oil prices.
Additionally, economic factors, including a strong dollar and indications of a prolonged timeline for interest rate hikes by the Federal Reserve, have weighed on oil prices. Chicago Federal Reserve President Austan Goolsbee's remarks about stalled progress on inflation have underscored market concerns about economic uncertainties.
Meanwhile, the MCX crude oil market opened lower on Monday, trading at 6800 levels, down 2.55% from its previous close. The commodity targets next support at 6705 if the downtrend persists, with resistance levels at 7114 and 7248.
(By Commoditiescontrol Bureau; +91-9820130172)
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