Oil Prices Dip on China Economic Concerns, Tensions in the Middle East Provide Support

Oil Prices Dip on China Economic Concerns

VoM News Desk | January 31, 2024 | 10:42 AM IST | China, Energy, World | Follow on Google News

Oil Prices Dip on China Economic Concerns, Tensions in the Middle East Provide Support /Reuters

Oil Prices Dip on China Economic Concerns, Tensions in the Middle East Provide Support

Oil prices edged lower on Tuesday, January 30, extending a more than one per cent drop in the previous session on China’s economic outlook, however, the losses were kept in check by supply fears driven by escalating tensions in the Middle East.

• Brent Crude (March): $81.88 per barrel (Down by $0.52)
• WTI Crude: $76.49 per barrel (Down by $0.29)

Factors Influencing Oil Prices:

1. China’s Economic Outlook: Concerns over China’s economic outlook due to a real estate crisis led to a more than 1% drop in oil prices.
2. Middle East Tensions: Escalating tensions in the Middle East, particularly the US vow to defend its troops after a deadly drone attack in Jordan by Iran-backed militants, prevented further losses.
3. US-Iran Tensions: Potential escalation of tensions between the US and Iran could impact Iran’s oil supply, representing 1-1.5% of global oil supply.

Other Market Trends:

• On MCX, crude oil futures for February 16 expiry were trading 1.13% higher at ₹6,471 per barrel.
• The upcoming February 1 OPEC meeting is not expected to bring a decision on oil policy for April, but it may provide insights into production plans.
• Saudi Aramco received a directive to maintain its maximum sustainable capacity at 12 million bpd, indicating the future demand outlook.

Price Outlook:

• Brent Crude at $82 is trading only about $4 above its fair value, with geopolitical premium accounting for the rest.
• Analysts expect continued volatility in crude oil prices, with support around $76.40–75.80 and resistance at $77.95-78.60.

Note: All prices mentioned are as of the time of publishing and are subject to market changes.

VoM News Desk

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