Oil down on Tuesday

Oil prices declined after a five-day rally, with Brent falling below $82 a barrel and West Texas Intermediate (WTI) hovering around $79. The drop followed a nearly 8 per cent rise in the previous sessions.

The likelihood of rising tension in the Middle East is increasing, but signs of weakening global demand have emerged. OPEC+ has reduced its demand forecasts for this year and the next, reflecting these concerns.

Despite modest gains for the year, supported by OPEC+ production cuts and a recovery in equities, the market remains cautious. The International Energy Agency (IEA) outlook is expected later on Tuesday, and upcoming US inflation data may influence monetary policy, impacting oil demand.

Market strategist Yeap Jun Rong from IG Asia Pte noted that US inflation data will be closely watched to gauge the Federal Reserve’s monetary policy path.

Timespreads in the oil market indicate underlying strength, with the gap between Brent’s two nearest contracts widening to 92 cents, up from 34 cents at the beginning of last week.

Attribution: Bloomberg

Subediting: M. S. Salama