ISTANBUL
Oil prices retreated on Monday as global markets refocused on market fundamentals after the easing of Middle East tension.
International benchmark Brent crude traded at $85.85 per barrel at 10.22 a.m. local time (0722GMT), a 1.65% decline from the closing price of $87.29 per barrel in the previous trading session.
The American benchmark West Texas Intermediate (WTI) traded at $80.75 per barrel at the same time, a 1.79% drop from the previous session that closed at $82.22 per barrel.
Following news of Israel carrying out a retaliatory attack on Iran, both benchmarks surged on Friday. The Brent crude price approached the $91 threshold amid concerns that a wider conflict would disrupt oil supplies in the Middle East, home to the majority of the world’s oil reserves. However, later on Friday, crude prices clawed back most of the gains after both sides downplayed the severity of the attack.
As concerns of a wider conflict eased despite unprecedented direct strikes by both sides, the oil market refocused on market fundamentals on the first day of the new week.
Demand concerns stemming from uncertainties regarding the global economy continue to weigh on prices. Weak demand worries were also sparked by the rise in crude oil stocks in the US, the largest oil consumer in the world.
While uncertainty regarding the timing of the Fed’s interest rate cuts continues, the dollar index reached 106. The rise in the value of the US dollar makes oil expensive for buyers using other currencies, leading to reduced purchases and downward pressure on prices.
Meanwhile, renewed US sanctions on Venezuela, which has an export capacity of around 600,000 barrels per day, fueled supply concerns.
