Oil Prices Under Pressure

Oil Prices Under Pressure by Andrew Blumer last updated on March 01, 2024

Oil Prices Under Pressure Amid Mixed Signals

Tuesday's session was not so fortunate for the oil markets as the prices lowered. The decline on Tuesday even wiped the gains from a day earlier, which indicates not everything is great with the oil.

According to experts, the crude oil supply has recently increased while the USA faces production outages. Furthermore, the geopolitical tension is also weighing heavily on the oil market.

Brent Down By 0.72%

Amidst all of this, Brent Crude's futures contract declined by 0.72%, equivalent to $0.58. Similarly, the price of one barrel of WTI futures declined by 0.60% which is equivalent to $0.45.

After the decline, the WTI futures trading price was $74.31, while the Brent futures were seen near $79.48. The bigger picture is that Brent has lost the $80 handle, which was achieved after a long wait.

Overall, the futures market of oil is still volatile as traders are worried about supply concerns along with consistent uncertainty.

According to Onada, traders in the oil market are looking at the OPEC+, interest rates, and the world's economic prospects. When we add the supply-demand imbalance into the throw, it becomes clear why the oil is under pressure.

On Monday, a 2% upside was seen in the crude prices after a development in the Russia-Ukraine dispute. However, this was reversed in Tuesday's session which suggests the presence of high volatility.

In several countries, the supply of crude oil has increased but the opposite trend is seen in the US market. For starters, North Dakota's 20% of the oil output is out of the system which is a serious problem for the market.

As per the details, the harsh weather induced the shutdown in the USA. As a result, it is only natural for the crude inventories to turn lower in the USA. This will likely be confirmed by the upcoming API report.

According to third-party analysts, a 3 million barrel decline will take place in the US oil inventories due to the recent shutdown.