Oil prices fell again on Monday, driven by a stronger U.S. dollar and concerns about delayed interest rate cuts affecting fuel demand globally.
This trend follows last week’s decline, influenced by similar factors. Market sentiment, previously lifted by a Nvidia-led rally, shifted due to expectations of prolonged interest rates, bolstering the dollar and pressuring commodity prices.
Since November, oil prices have fluctuated between $70 and $90 per barrel, influenced by increased U.S. supply and uncertainties in Chinese demand amid geopolitical tensions.
Analysts noted a lack of new factors affecting prices, balancing positive factors like reduced OPEC output with negative concerns about Chinese demand.
Despite tensions in the Middle East, contributing a $2 per barrel premium to Brent, Goldman Sachs revised its peak price forecast to $87 per barrel, citing disruptions in the Red Sea.
They anticipate optimistic global oil demand growth in 2024 but adjusted forecasts, lowering China’s demand projections while raising those for the U.S. and India.
Negotiations for a potential hostage deal involving the U.S., Egypt, Qatar, and Israel are ongoing amidst the Israel-Hamas conflict, with uncertainties highlighted by White House national security adviser Jake Sullivan.