(Bloomberg) — Oil prices fell after a five-day rise, with a likely escalation in the Middle East conflict offset by signs of a slowdown in global demand growth.
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Brent fell below $82 a barrel after rising nearly 8 percent over the past five sessions. West Texas Intermediate traded at about $79. While the US sees an Iranian attack on Israel as more likely and believes it could happen this week, there are signs of weak consumption, prompting OPEC to lower its demand forecasts for this year and next.
Crude oil prices rose slightly for the year, helped by OPEC+ production cuts and a recovery in stock prices from last week’s plunge. An outlook from the International Energy Agency is expected later on Tuesday, while US inflation data on Wednesday could provide clues to the largest oil consumer’s monetary policy.
“Eyes will be on the coming inflation in the US to determine the Fed’s next course of monetary easing,” said Yeap Jun Rong, market strategist at IG Asia Pte. “The risks of a hard landing have not yet been fully eliminated,” he said, pointing to the possibility of an economic slowdown that could impact oil demand.
The timescales suggest underlying strength in the markets, with the gap between the two closest Brent contracts widening further in recent trading days, trading at 92 cents a barrel in the bullish backwardation pattern, compared to 34 cents at the start of last week.
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