Oil prices slip lower, consolidating ahead of data-heavy week
Investing.com-- Oil prices retreated Monday as markets awaited new developments in the Middle East conflict, while anticipation of several key U.S. and Chinese economic readings this week kept sentiment on edge.
By 05:15 ET (10:15 GMT), Brent oil futures fell 0.8% to $77.66 a barrel, while West Texas Intermediate crude futures dropped 0.9% to $72.16 a barrel.
A U.S. market holiday is expected to keep trading volumes thin.
Crude prices consolidated in early trade Monday, after last week saw strong gains on the back of U.S. and British strikes against the Iran-backed Houthi group in Yemen. This ramped up concerns over a broader conflict in the Middle East, which, coupled with the Israel-Hamas war, threatened to disrupt oil supply from the region.
Markets were now awaiting any potential retaliation by the Houthis for last week’s strikes, after the group said it will continue targeting ships headed towards Israel.
«While geopolitical risks are certainly building, we are still not seeing a reduction in oil supply as a result of developments in the region,» said analysts at ING, in a note. «But, the more escalation we see in the region, the more the market will have to start pricing in a larger risk of supply disruptions.»
Oil prices were also nursing a weak start to 2024 after tumbling over 10% in the past year, as markets remained convinced that global crude demand will see little improvement this year amid pressure from high interest rates, cooling economic growth and sticky inflation.
Focus was now squarely on key upcoming economic readings from the U.S. and China this week, for more cues on the potential path of demand.
China’s central bank decided against cutting medium-term lending rates earlier Monday, raising concerns
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