Crude oil contracts closed in the negative territory on Friday, March 22, while remaining relatively stable throughout the week. The possibility of a ceasefire in Gaza weighed down crude oil prices, although a combination of factors, including the ongoing conflict in Ukraine and a decrease in U.S. oil rigs, helped mitigate the downward pressure on oil contracts.
According to market data, WTI crude futures experienced a decline of 44 cents, or 0.54%, closing at $80.63 per barrel. Similarly, BRENT crude futures saw a decrease of 35 cents, or 0.41%, settling at $85.43 per barrel.
Analysts suggest that investors are closely monitoring the developments in Gaza over the weekend. A successful outcome in peace talks could potentially ease tensions and allow oil tankers to navigate through the Red Sea, particularly if Yemen’s Houthi rebels cooperate.
The possibility of a ceasefire gained traction following statements from U.S. Secretary of State Antony Blinken on Thursday, March 21. Blinken expressed optimism regarding talks in Qatar, which aim to broker an agreement between Israel and Hamas to cease hostilities in Gaza. Negotiations have been ongoing in Qatar for approximately six weeks.
In addition to geopolitical developments, the strengthening of the U.S. dollar has impacted crude oil contracts. The appreciation of the dollar makes dollar-denominated oil contracts more expensive for investors holding other currencies, subsequently affecting oil demand.
However, supportive factors such as the decrease in the number of U.S. oil rigs and the trend of lowering interest rates in the United States have helped bolster oil prices. Data from Baker Hughes, a U.S. energy company, revealed a decline of one rig in the U.S. oil rig count, totaling 509 rigs for the week. This reduction suggests a potential decrease in future oil supply.
Furthermore, the intensification of fighting in Ukraine has contributed to the resilience of oil prices. On Friday, Russia launched a significant attack on Ukraine’s energy utilities, resulting in power outages in various regions, including the capital city, Kiev.
The Spot Market is Closed
Saturday, March 23, 2024
| Energy Updated at | USD Price | Change | %Change |
| Crude Oil 07.35 | 80.82 | -0.25 | -0.31% |