This Tuesday, oil prices took a hit, marking a second day of decline after a recent uptrend, with Brent crude dropping below the $90 mark.
This retreat is partly seen as investors cashing in on gains. Additionally, the reduction in tensions between Iran and Israel has played a role in softening oil prices.
May’s West Texas Intermediate (WTI) concluded the day 1.39% lower, decreasing by $1.20 to $85.23 a barrel on the New York Mercantile Exchange.
Concurrently, June’s Brent crude fell by 1.06%, or $0.96, to $89.42 a barrel on the Intercontinental Exchange.
Matt Zeller, StoneX’s senior analyst, views this movement as strategic profit-taking by investors following robust gains.
Oil prices had initially climbed earlier in the day but gradually waned as Middle Eastern tensions did not escalate further.
Despite the recent dip, City Index analysts foresee a continued upward trajectory.
The deadlock in ceasefire talks between Israel and Hamas signals prolonged conflict, potentially impacting the oil market.
Israeli Prime Minister Benjamin Netanyahu’s comments suggest a resolution may not be near, further intensifying market watchfulness.
Fiona Cincotta of City Index highlights the deadlock’s implications, suggesting an expanded conflict could threaten oil supplies.
Additionally, Iran’s commitment to secure the Strait of Hormuz underscores the geopolitical significance of the region for global oil flows.
Russell Hardy of Vitol believes the market is bracing for further price increases, anticipating inflation and interest rate developments.
This collective sentiment reflects an enduring optimism among investors about oil’s market value, despite temporary fluctuations and geopolitical tensions.