Oil prices saw on Monday a decline of over $1 per barrel. Brent crude, specifically, fell below $90 as tensions in the Middle East eased following Israel’s commitment to engage in new discussions for a potential ceasefire in the six-month conflict. By 04:30 GMT, Brent crude futures had dropped by $1.42, equivalent to a 1.6 percent decrease, settling at $89.75 per barrel. Simultaneously, U.S. West Texas Intermediate (WTI) crude saw a decline of $1.32, or 1.5 percent, with a price of $85.59 per barrel.
Read more: Oil prices surge above $90, reaching highest level since October
Saudi Arabia, the leading oil exporter globally, raised the official selling prices for all crude grades to Asia in May, as anticipated, due to a tightening of the supply of heavy oil. In another development, a fire incident occurred on an offshore platform operated by Mexico’s national oil company, Pemex, resulting in the unfortunate death of at least one contractor. This event followed Pemex’s request for its trading unit to cancel up to 436,000 barrels per day of crude exports in April.
According to analysts at Goldman Sachs, they predict that Brent crude will remain below $100 per barrel in their base case scenario. This scenario assumes stable demand, no further geopolitical disruptions to oil supply, and an increase in production by OPEC+ during the third quarter, given the availability of spare capacity.
In the United States (U.S.), the number of oil rigs increased by two to reach 508, while gas rigs fell by two to 110. This gas rig count is the lowest recorded since January 2022, as reported by Baker Hughes in its Friday report.
U.S. employment report exceeds expectations
The U.S. employment report released on Friday surpassed expectations, indicating that the economy concluded the first quarter on a solid footing. As a result, the anticipated interest rate cuts by the U.S. Federal Reserve may be delayed this year.
Auckland-based independent analyst Tina Teng suggested that the Fed may postpone rate cuts due to robust U.S. economic data and a tight labor market.
Investors await U.S. and China CPI data
Investors will closely analyze the upcoming consumer price index data from the U.S. and China, which is scheduled for release later this week. These figures will provide further insights into the potential timing of Fed rate cuts and the economic condition of the world’s two largest oil consumers.
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