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12/08/24
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Crude Prices Higher on OPEC Cutting 2024 Demand Forecast, High Middle Eastern Tensions
On Monday, crude prices were higher, supported by geopolitical tensions in the Middle East and bolstered by easing concerns over the U.S. economy.
Brent oil futures were 0.9% higher at $80.35 per barrel while West Texas Intermediate crude futures rose 1.1% to $77.66 per barrel.
Crude market sentiment has been bolstered by Axio reporting on Sunday that Israeli intelligence believes Iran will attack Israel directly within days.
The strike will likely be in retaliation for last month’s assassination of Hamas’ leader Ismail Haniyeh in Tehran.
Over the weekend, Israel was also maintaining its offensive in Gaza with a round of strikes, indicating little chance of the conflict de-escalating.
The sustained conflict resulted in traders attaching a bigger risk premium to oil prices, amid growing fears that a bigger Middle Eastern war would disrupt oil supplies from the region.
The sentiment was also aided by recent encouraging U.S. economic data, as traders bet that worries about a U.S. recession were overblown.
This week’s focus will be on inflation readings from several major economies this week, including the U.S.
U.S. consumer price index inflation will be released on Wednesday and will likely show July inflation has cooled, which is good news for expectations of an interest rate cut in Sept.
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