As the world’s top investment manager, I bring you the latest news on oil prices. In Asian trade on Tuesday, oil prices saw a slight decline, continuing recent losses. This comes as reports of progress towards an Israel-Hamas ceasefire led traders to reduce the risk premium on crude.
Persistent concerns about weak demand, particularly in China, the world’s top oil importer, have also contributed to keeping crude prices subdued.
The price of expiring oil in October dropped slightly to $77.61 a barrel, while also edged lower to $73.60 a barrel by 21:45 ET (01:45 GMT).
Israel Accepts Ceasefire Proposal, Hamas Response Awaited
U.S. Secretary of State Antony Blinken reported that Israel’s Prime Minister Benjamin Netanyahu has agreed to a preliminary American proposal for a ceasefire in Gaza. The focus now shifts to Hamas’ response, with the Palestinian group expressing doubts about the ceasefire.
Concerns about a prolonged conflict in the Middle East impacting oil prices have kept a risk premium in place, briefly pushing prices above $80 a barrel. However, the lack of Iranian retaliation against Israel following the killing of a Hamas leader in Tehran has eased these fears.
Demand Worries and China’s Economic Situation
Aside from Middle East tensions, worries about demand have weighed on oil markets, especially in China. The country’s central bank maintained its benchmark rate unchanged after a surprise rate cut in July.
Focus is now on potential economic support from Beijing as China grapples with slowing growth. July saw a second consecutive month of falling oil imports in China due to sluggish economic conditions affecting fuel demand.
On a brighter note, steady fuel demand in the U.S. has helped offset concerns about a slowdown in China. U.S. inventories have been shrinking for several weeks, providing some support to oil markets.
Market watchers are also awaiting economic signals from the U.S., with the Federal Reserve Chair set to speak at the Jackson Hole Symposium on Friday.