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Oil Prices Drop After Monday’s Rise

oil market

Oil prices rose on Monday after the Hamas attack on Israel over the weekend that spooked the markets and gave rise to speculation that the United States could act to clamp down on Iranian oil exports, which have continued to flow to a significant degree despite U.S. sanctions.

Crude oil prices have begun to drop after a nearly $4 per barrel spike on Monday following the Hamas attack on Israel and escalating tensions in the Middle East. The price of Brent crude oil shot up to around $89 per barrel on Monday before retreating to around $86 by Wednesday afternoon.

The primary causes behind this drop can be linked to the strengthening of the US dollar, the potential for another increase in interest rates, and reduced demand from traders.

In an interview with BBC, the Secretary General of OPEC stated that a drop in crude oil prices is not expected to occur in the near future. He also asserted that the decision by OPEC members to reduce production until the end of the next year could potentially result in a significant shortage of oil supply in the global market, causing crude oil prices to surpass 100 USD.

Simultaneously, City Group offered a contrasting view, predicting that the global market would trend upward with a downward trajectory for crude oil prices. They estimate an average price of 82 USD for crude oil in the fourth quarter of this year, with a projected price of 74 USD for 2024.

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Oil Prices Drop After Monday’s Rise