Oil Prices Fluctuate in Response to Economic Growth, Geopolitical Risks and Global Inventories
On April 14, 2024, the Elk Hills Oil Field in California showed oil wells in action as gas prices continued to rise. The view underscored the impact of the changing economic landscape on the oil industry. The disappointing U.S. economic growth in the first quarter, which came in at 1.6% compared to the expected 2.4%, led to a decline in crude oil futures. Slower economic growth can have a negative effect on crude oil demand, influencing prices.
The West Texas Intermediate June contract closed at $82.45 a barrel, down 0.43%, while the Brent June contract closed at $87.62 a barrel, down 0.45%. RBOB Gasoline May contract was priced at $2.72 a gallon, down 0.36%, and Natural Gas May contract was $1.62 per 1,000 cubic feet, down 1.63%. Oil prices closed lower on Wednesday, marked by a slightly bearish market with global inventories on the rise.
Geopolitical risks impacting oil prices have decreased as tensions between Israel and Iran eased thanks to analysts at Piper Sandler. The market is currently moving sideways with limited downside risk due to this positive development and low unemployment rates resulting in stable sentiment according to Piper Sandler analysis report that lowered odds of US recession from “coin flip” to more favorable outcome . Growing demand for oil is expected as refiners are operating near capacity with minimal capacity additions even though global inventory levels are increasing due to this sideways movement of market .
