In early trading on Thursday, oil prices experienced a slight downturn amid contrasting concerns over the U.S. economy and escalating tensions in the Middle East.
Brent crude futures saw a marginal decline of 9 cents to $86.95 a barrel, while U.S. West Texas Intermediate crude futures slipped by 7 cents to $82.74 a barrel.
Analyst Toshitaka Tazawa highlighted the persistent risk of conflicts spreading from Israel’s attacks on Gaza to neighboring regions, despite a recent easing of tensions between Iran and Israel.
Israeli airstrikes continued in Gaza, contributing to a volatile geopolitical landscape, while economic indicators pointed towards a cooling of U.S. business activity.
April data revealed a four-month low in U.S. business activity, raising concerns about a potential slowdown in the world’s largest economy.
The U.S. Federal Reserve remains apprehensive about unexpectedly high inflation and employment readings, which have stalled efforts to meet the central bank’s 2% inflation target.
Upcoming data releases, including U.S. gross domestic product and personal consumption expenditure figures, will provide further insight into the trajectory of U.S. interest rates.
Amidst these economic uncertainties, the Energy Information Administration reported an unexpected decrease in U.S. crude oil inventories, signaling increased exports and a decline in gasoline stockpiles.
Despite this, the market response was muted, with oil prices experiencing only a temporary boost before resuming their downward trend.
