Global oil prices today took a surprising dip, falling over 3% despite ongoing production cuts by OPEC+ and its allies.
This shift sent prices tumbling to their lowest levels since February.West Texas Intermediate (WTI) for July saw a drop of 3.60% to $74.22 per barrel, while Brent crude for August fell 3.39% to $78.36 per barrel.The backdrop? OPEC+ had extended production cuts, hoping to boost prices.
Instead, the market took a different turn, starting strong and quickly reversing.Analysts from Capital Economics suggest that, although supply may tighten in the near term, prices could slide further into 2025 due to regulatory adjustments.Meanwhile, Julius Baer analysts project that the robust supply chain will cool market sentiment, potentially lowering prices to $70 by late 2024.Oil Prices Drop Over 3% Amid Supply Concerns and Geopolitical Tensions.
(Photo Internet reproduction)Adding to the mix, geopolitical tensions seemed to ease, influenced in part by the United States President Joe Bidens endorsement of a ceasefire proposal in the Gaza Stripa development still pending final agreements.Further stirring the market were the diverse PMI readings from major economies, pointing towards a gradual industrial recovery.This data provides a pulse check on manufacturing health globally, influencing energy demand forecasts.Energy investors also watched European natural gas prices, which spiked following a disruption at a Norwegian plant.This event highlights the interconnected nature of global energy markets, where a single incident can ripple through the sector.