After missile attacks over the weekend, there are concerns of a wider conflict in the region.
Vandana Hari from Vanda Insights talks about the tensions in the Middle East region and also emphasizes that the U.S. economic outlook is at the center stage of global oil demand.
"Israel's response may include an attack on Iran's oil supply and related infrastructure, which would put at risk 3 - 4% of global oil supply," said Vivek Dhar, mining and energy commodities strategist at the Commonwealth Bank of Australia. Dhar forecasts that Brent will trade in the range of $75 to $85 per barrel in September due to diminishing prospects of a truce in Gaza and an expected Iranian retaliation against Israel.
Oil prices extended gains on Monday on fears a major spillover in fighting from the Gaza conflict into the Middle East could disrupt regional oil supplies, while imminent U.S. interest rate cuts lifted the global economic and fuel demand outlook.
Crude oil faces bearish outlook amid China's weakening demand and OPEC+'s uncertain production decisions. Watch for policy shifts.
The past week in the crude oil markets have been a bit of a mess, as the markets are trying to see some kind of move in one direction or the other. The market is sideways and has been for some time.
The crude oil markets continue to recover, and at this point in time are probably going to be watching central bank statements more than anything else. With this, the market looks like it is going to continue to see a lot of volatility, but that's normal for oil.
U.S. crude is down 2.9% for the week, while Brent is down 1.4%. Concern about the strength of global demand for oil continues to overshadow geopolitical risk.
‘Increasingly likely' OPEC+ will ditch plans to begin increasing supply in October due to price weakness: ING
Oil prices face a weekly decline as OPEC+ deliberates crucial output decisions amidst U.S. recession fears and easing Gaza supply concerns.
Oil prices were steady in early Asian trading on Friday, but were poised to end the week lower as downward revisions to U.S. employment data raised demand concerns and ceasefire talks in Gaza eased worries about supply disruptions.
Crude oil tests key support at 72.82 within a large symmetrical triangle. A breakout or breakdown could trigger significant volatility in the coming days.