Oil prices fell by around 5%, marking their largest daily loss in more than six months, as market sentiment shifted following a decline in geopolitical tensions that had previously supported prices.
Brent crude futures dropped by more than three dollars per barrel, while US West Texas Intermediate crude fell by a similar percentage, as prices retreated from recently elevated levels amid profit taking by investors.
This decline coincided with a broad sell off across commodity markets, led by notable losses in precious metals, alongside a rise in the US dollar, which added pressure on dollar denominated commodities and reduced their attractiveness to investors outside the United States.
Analysts believe that a reduction in the market’s risk premium accelerated the pace of the sell off, as markets reassessed the likelihood of supply disruptions, particularly amid signs of stable oil flows from the Middle East.
At the same time, the OPEC+ alliance maintained its current production policy, keeping supply levels unchanged, while weak seasonal demand continues to limit upside potential in the near term.
Research reports indicate that oil market fundamentals remain tilted to the downside, driven by ample supply and slowing global demand growth, which could keep oil prices under pressure in the coming period unless new economic catalysts emerge to rebalance the market.
Stay informed about global markets through our previous analyses. and Now, you can also benefit from LDN company services via the LDN Global Markets trading platform.
