Oil prices eased a bit in early trade on Wednesday as concerns regarding global demand bypassed supply worries on geopolitical tensions. Brent futures for June delivery fell 7 cents or 0.1 per cent to touch $89.16 per barrel during the early morning hours on Wednesday, LSEG data revealed.
At the same time, US crude futures for May delivery slipped 10 cents or 0.1 per cent to touch $85.26 per barrel, reported Reuters. Oil prices in the week have eased so far as economic headwinds influenced investor sentiments, restricting any gains from global conflicts.
Global demand concerns regarding weak economic growth in China and reduced chances of a rate cut from the US have overshadowed any supply fears arising from the Iran-Israel conflict.
Hiroyuki Kikukawa, President, NS Trading, noted, “Demand concerns increased due to expectations that U.S. interest rate cuts are likely to be delayed and weaker-than-expected economic data from China. Since the market had been rising until last week on supply worries amid escalating tensions in the Middle East, the relatively restrained Iranian aggression has not provided the ground for buying up.”
Fed Chair Jerome Powell recently said that the disappointing data recently indicated inflation data beating analysts’ expectations and this could mean that the Federal Reserve will need more time to ensure that inflation remains on the path to 2 per cent.
The growth rate of the Chinese economy beat market expectations in the first quarter, however, multiple indicators such as property investment, retail sales, and industrial output, reflected that demand in the country remained on a weaker end, and impacted overall pace in the economy.
Analysts noted that the attack from Iran on Israel is not expected to result in dramatic sanctions on the country’s oil exports from the United States.
Also Read : Largest FPO In India, Vodafone Idea Raises Rs 5,400 Crore From Anchor Investors