Commodities
Oil prices dip on US interest rate jitters, Middle East uncertainty
![](https://letizo.com/wp-content/uploads/2024/05/oil-prices-dip-on-us-interest-rate-jitters-middle-eastuncertainty_664ca07adbbb0.jpeg)
Investing.com– Oil prices fell Tuesday on concerns high U.S. interest rates will eat into demand this year, amid continued uncertainty in the Middle East.
At 08:15 ET (12:15 GMT), fell 1.8% to $82.17 a barrel, while fell 1.9% to $77.77 a barrel.
US rate fears cloud demand outlook
Fears of high-for-longer U.S. rates were a key point of pressure for crude markets, after a string of Fed officials warned of such a scenario amid sticky inflation.
Vice Chair Philip Jefferson said on Monday that it was too early to tell if the slowdown is “long lasting,” and Vice Chair Michael Barr noted that restrictive policy needs more time, dulling hopes for early cuts.
There are more Fed speakers to digest Tuesday, including Barr once more, as well as FOMC members Thomas Barkin, John Williams and Raphael Bostic, ahead of the release of the of the Fed’s late-April meeting on Wednesday.
High rates are expected to dull activity in the largest economy in the world, likely hitting crude demand, while also limiting money for investment and economic growth, which usually support oil demand.
The International Energy Agency last week trimmed its outlook for crude demand this year, citing concerns over weaker economic conditions due to pressure from interest rates.
On the flip side, the Organization of Petroleum Exporting Countries maintained its demand forecast, citing strength in top exporter China.
China has been a point of confidence for oil demand, especially as Beijing rolled out a string of stimulus measures in recent weeks to support growth.
Political uncertainty in Middle East
Iranian President Ebrahim Raisi, who was seen as a successor to Supreme Leader Ayatollah Ali Khamenei, was killed in a helicopter crash over the weekend, while there are concerns over the health of Saudi King Salman bin Abdulaziz after Crown Prince Mohammed Bin Salman deferred a trip to Japan.
While these events have not had an impact on supplies yet, they have created a degree of political uncertainty in two major oil-producing countries.
OPEC meeting awaited for more cues
Oil markets were also awaiting an in June, where the cartel, along with its allies including Russia, will discuss output policy, including whether to extend the voluntary supply cuts of 2.2 million barrels per day from mainly Saudi Arabia.
The group, known as OPEC+, could well extend some voluntary cuts past their initial June-end deadline if demand fails to pick up.
“As the market waits for clarity from OPEC+ on its output policy for the second half of the year, there are some signs of weakness in the market,” said analysts at ING, in a note.
“Refinery margins have been trending lower for some time, raising the prospect of cuts in refinery runs, particularly in Asia. In addition, the physical crude market is also weaker.”
(Ambar Warrick contributed to this article.)
Commodities
Oil prices settle lower after weak August jobs report adds to demand concerns
![](https://letizo.com/wp-content/uploads/2024/09/oil-prices-settle-lower-after-weak-august-jobs-report-addsto-demand-concerns_66dc53fb8f210.jpeg)
Investing.com — Oil prices settled lower Friday, ending the week with a loss as weaker U.S. nonfarm payrolls stoked concerns about an economic-led slowdown in crude demand.
At 2:30 p.m. ET (1430 GMT), the futures (WTI) traded fell 2.1% to settle at $67.67 a barrel, while contract fell 2.2% to $71.06 per barrel.
U.S. economic slowdown worries resurface after weak jobs report
The US economy added fewer jobs than anticipated in August, but rose from a sharply revised July figure, according to Labor Department data that could factor into the Federal Reserve’s next policy decisions.
Nonfarm payrolls came in at 142,000 last month, up from a downwardly-revised mark of 89,000 in July. Economists had called for a reading of 164,000, up from the initial July mark of 114,000.
Following the release, bets that the Fed will introduce a deeper 50 basis-point rate cut — rather than a shallower 25 basis-point reduction — increased.
Concerns about the demand come just a day after OPEC+ said it had agreed to postpone a planned increase in oil production for October and November.
U.S., Europe working on Iran sanctions
Geopolitical tensions ratcheted up on Friday after the U.S. and Europe they were working on sanctions to impose on Iran after the Tehran sent missiles to Russia.
The U.S. had previously warned Iran about transferring missiles to Russia, saying it would represent a major escalation in Iran’s support of Russia’s war against Ukraine.
Commodities
Goldman Sachs expects OPEC+ production increases to start in December
![](https://letizo.com/wp-content/uploads/2024/09/goldman-sachs-expects-opec-production-increases-to-start-indecember_66dc53f61803f.jpeg)
(Reuters) – Goldman Sachs adjusted its expectations for OPEC+ oil production saying it now expects three months of production increases starting from December instead of October, the bank said in a note on Friday.
OPEC+ has agreed to delay a planned oil output increase for October and November, the producers group said on Thursday after crude prices hit their lowest in nine months, adding it could further pause or reverse the hikes if needed.
However Goldman Sachs maintained its range of $70-85 per barrel and a December 2025 Brent forecast at $74 per barrel.
The investment bank expects the effects of a modest reduction in OPEC+ supply in the upcoming months to be counterbalanced by easing effects from the current softness in China’s demand and faster-than-expected recovery of Libya’s supply.
“We still see the risks to our $70-85 range as skewed to the downside given high spare capacity, and downside risks to demand from weakness in China and potential trade tensions,” Goldman Sachs said.
Brent crude futures were down $1.63, or 2.24%, to $71.06 a barrel on Friday, their lowest level since December 2021. U.S. West Texas Intermediate crude futures fell $1.48 on Friday, or 2.14%, to $67.67, their lowest since June 2023. [O/R]
Commodities
Citi, Bank of America see oil prices potentially going to $60
![](https://letizo.com/wp-content/uploads/2024/09/citi-bank-of-america-see-oil-prices-potentially-going-to60_66db0275685ed.jpeg)
Investing.com — Strategists at Citi Research said oil prices could decline to around $60 per barrel by 2025, citing a significant market surplus as the primary driver.
While recent supply disruptions in Libya and a delayed production cut unwinding by OPEC+ have offered short-term support for Brent prices in the $70-72 range, Citi views this as temporary.
“At the time of writing, markets have not reacted to the OPEC+ decision, with Brent around flat to the 4 September close. Still, the Libyan situation could take months rather than a week to resolve, strategists wrote.
They highlight the likelihood of a strong market surplus emerging next year, pushing prices lower.
“We recommend selling on a bounce toward ~$80 Brent, as we look ahead to moves down to the $60 range in 2025 as a sizeable market surplus emerges,” the note states.
OPEC+ has delayed the start of its planned production cut unwind from October 2024 to December 2024, with the process now set to conclude by the end of 2025. This decision comes in response to recent market weakness and price declines, despite ongoing disruptions to Libyan oil supplies and broader economic concerns in the U.S. and China.
Separately, Bank of America’s Commodities Research team has revised down its price forecast to $75 per barrel for the second half of 2024, down from nearly $90, and for 2025, reduced from $80.
The team cites concerns about growing global oil inventories despite assuming OPEC+ will delay planned production increases. They note that weaker demand growth, combined with record OPEC+ spare capacity exceeding 5 million barrels per day, has dimmed the outlook for oil prices.
“In effect, we now see Brent oil prices moving from the top toward the middle of our unchanged $60-80/bbl medium-term range faster than previously warned,” BofA strategists said. This surplus in capacity, along with slower demand, also reduces the risk of price spikes from potential geopolitical disruptions.
- Forex2 years ago
Forex Today: the dollar is gaining strength amid gloomy sentiment at the start of the Fed’s week
- Forex2 years ago
How is the Australian dollar doing today?
- Forex2 years ago
Dollar to pound sterling exchange rate today: Pound plummeted to its lowest since 1985
- Forex2 years ago
Unbiased review of Pocket Option broker
- Cryptocurrency2 years ago
What happened in the crypto market – current events today
- World2 years ago
Why are modern video games an art form?
- Stock Markets2 years ago
Morgan Stanley: bear market rally to continue
- Commodities2 years ago
Copper continues to fall in price on expectations of lower demand in China