Oil prices struggled to recover on Monday as economic turmoil weighed on the global oil demand outlook, geopolitical concerns in the Middle East and an attack on a fuel export terminal in Russia over the weekend.
Brent crude fell 9 cents, or 0.1%, to $78.47 a barrel at 03:53 GMT, after falling 54 cents on Friday.
West Texas Intermediate (WTI) crude oil contract for February delivery rose 11 cents to $73.52 per barrel, expiring Monday. The more active March WTI contract was down 4 cents at $73.21 a barrel.
This morning’s slower-acting reopening reflects the current sentiment in the crude oil market despite ongoing geopolitical tensions in Europe and the Middle East.
Prices remained virtually unchanged despite Russia’s alleged Ukrainian drone attack on a major fuel export terminal. Russian manufacturer Novatek said on Sunday that it had to suspend some of its operations due to a fire at its Baltic Sea terminal.
The Gaza war continues at full speed in the Middle East. Attacks by the Iran-linked group Houthis in the Red Sea and Gulf of Aden have disrupted global trade. The United States said on Saturday it shot down another anti-ship missile that was being prepared to be launched into the Gulf of Aden by Yemen’s Houthi militants.
The clashes tightened European and African crude oil markets, pushing the premium for the front-month Brent contract over the six-month contract to $1.99 on Friday, the highest level since November. This structure, called backwardation, shows the perception that supply is tighter for faster delivery.
Oil fundamentals remain a headwind for prices. Manufacturing is high and the growth outlook in China and Europe is mixed, while GDP data this week shows the pace of the US economy has slowed significantly.
The latest demand growth forecasts for 2024 by the US Energy Information Administration (EIA), the International Energy Agency (IEA), and the Organization of the Petroleum Exporting Countries (API) range widely between 1.24 million and 2.25 million barrels per day, but three organization expect demand to slow down in 2025.
The number of oil rigs operating in the United States fell by two last week to 497, the lowest level since mid-November, according to data from Baker Hughes on Friday.
