Oil prices dropped due to concerns over weakening fuel demand and the potential for a de-escalation in the conflict between Iran and Israel. West Texas Intermediate settled below $71 a barrel, while Brent settled below $74 a barrel. Despite a 4.8% increase last week, crude prices are down this quarter as fears mount over reduced demand from China and the US and increased output from non-OPEC countries.
Iranian President Masoud Pezeshkian’s offer to ease tensions with Israel has alleviated some worries about oil supply disruptions in the region. However, hedge funds are increasingly bearish on diesel, and technical factors are also weighing on crude prices.
In China, authorities are taking steps to boost the economy, which could bolster crude demand. On the other hand, the US Gulf Coast is bracing for a potential hurricane, prompting Shell Plc to curtail production at some facilities in the Gulf.
Overall, sentiment among energy investors has turned bearish, with concerns about oversupply in the market. Increased stimulus from China may help support crude prices in the future. For more energy news, subscribe to Bloomberg’s Energy Daily newsletter.
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