Looking at today, 29th April 2024, oil prices moved downward in early Asian trading on Monday. Brent crude futures saw a reduction of 75 cents, or 0.84%, landing at $88.75 a barrel, while West Texas Intermediate futures fell 65 cents, or 0.78%, to $83.20 a barrel by 1221 GMT. This decline comes after a period of gains, demonstrating the market’s sensitivity to economic indicators.
The recent U.S. inflation rate of 2.7% over the past 12 months through March has exceeded the Federal Reserve’s target. The persistent inflation suggest the possibility of ‘higher-for-longer’ interest rates, leading to a robust U.S. dollar and exerting downward pressure on commodity prices.
The correlation between a strong dollar and commodity prices is evident as the dollar’s rise makes oil more expensive for holders of other currencies, dampening demand. This relationship is crucial to understanding the short-term movements in oil prices.
Despite the current downward trend, oil prices may rebound if upcoming U.S. inventory data and China’s PMI index reflect positive changes. These indicators traditionally serve as barometers for economic health and will be closely watched by investors.
Friday’s trading session ended with Brent crude up 49 cents and WTI up 28 cents, amid concerns over supply interruptions due to developments in the Middle East. Naturally, these gains underscore the market’s ongoing concern with geopolitical tensions and their potential impact on oil supply.
Market participants seem to have disregarded potential supply disruptions from drone strikes on oil refineries in Russia’s Krasnodar region. Following the attack, operations at the Slavyansk refinery were partially suspended, as stated by a plant executive.
This situation could have implications for the global supply if escalations continue.
Start trading today with one of the best forex trading brokers. Click here to open a live account.
Official partners:
