How did oil prices start the week?


Lerato Khumalo

The barrel price of Brent oil, which rose to $81.79 on Friday, finished the day at $84.33.

The barrel price of Brent oil decreased by 0.02 percent compared to the closing time at 10.05, reaching 84.31 dollars. At the same time, West Texas Intermediate (WTI) crude oil was sold at $80.71 per barrel.

Uncertainties regarding the steps to be taken by the US Federal Reserve (Fed) in the coming period continue to have an impact on oil prices.

The idea that interest rates will remain higher for a while in the USA, the world’s largest oil consuming country, negatively affects the oil demand of market players and puts downward pressure on prices.

The probability of the Fed’s first interest rate cut in September is priced at 72 percent and 91 percent in November. Following a possible interest rate cut, the probability that the bank will cut interest rates for the second time in December is priced at 84 percent.

On the other hand, ongoing geopolitical tensions in the Middle East, where most of the global oil reserves are located, affect prices by increasing concerns that they may disrupt supply.

Although Hamas’ Political Bureau Head Ismail Haniyeh reiterated at the symposium organized by the Strategic Thought Forum in Beirut, the capital of Lebanon, that they are open to all initiatives that will stop the war and meet the demands of the resistance, the ongoing turmoil in the region restricts the decline in oil prices.

In the statement made by the civil defense organization in Gaza, it was reported that Israeli warplanes targeted a health center in the central part of the Gaza Strip yesterday and two Palestinian Ministry of Health personnel lost their lives.

In Yemen, the Iranian-backed Houthis continue their attacks on commercial ships, which they say are affiliated with Israeli companies, as a reaction to Israel’s attacks in Gaza.

Houthis’ Military Spokesperson Yahya Seri stated in his statement that they hit two ships in the Red Sea and the Indian Ocean with a cruise missile and an unmanned marine vehicle. This situation increases oil prices by increasing concerns that it will negatively affect activities in the Red Sea, which is critical for global maritime trade.

It is stated that technically, for Brent oil, the range between 84.21 and 84.51 dollars can be viewed as resistance, and the range between 83.75 and 83.59 dollars can be viewed as a support zone.