After a brief gain in the previous session, crude oil futures turned lower on Thursday as traders eagerly awaited the release of fresh data on U.S. economic growth. Despite this decline, market analysts believe that ongoing geopolitical uncertainties and potential disruptions to supply could limit further downturns in the oil market.
- December Brent crude futures, the international benchmark, saw a decrease of $1.71 or 1.9%, bringing the price per barrel to $87.42 on ICE Futures Europe.
- West Texas Intermediate crude oil for December delivery experienced a drop of 1.65% or $1.9, reaching $83.69 per barrel on the New York Mercantile Exchange.
- November gasoline prices fell by 26 cents or 1.1%, settling at $2.26 per gallon. At the same time, November heating oil experienced a decrease of 1.3%, with prices reaching $2.99 per gallon.
- November natural gas had a slight increase of 0.2% and was valued at $3.01 per million British thermal units.
The recent decline in oil prices can be attributed to the release of Wednesday’s supply data from the U.S. Energy Information Administration, which revealed unexpected increases in domestic crude and gasoline supplies.
Looking ahead, market participants are closely monitoring Thursday’s gross domestic product (GDP) data, which could potentially amplify the ongoing selloff if it falls short of the economists’ expectations for a growth rate of 4.7%, according to a poll conducted by The Wall Street Journal.
Additionally, the conflict between Israel and Hamas may contribute to a limitation in further oil price declines as speculators anticipate potential supply disruptions amidst the geopolitical uncertainty.
David Morrison, senior market analyst at Trade Nation, provided some insight into the current market sentiment: “While oil appears to be trading in a minor downtrend, any downside ‘overshoots’ are being eagerly embraced by bullish speculators. The uncertain economic background and potential supply interruptions due to hostilities across the Middle East are both factors contributing to this dynamic.”
As the market awaits the release of U.S. economic data, crude oil futures experienced a downturn. However, ongoing geopolitical tensions and the potential for supply disruptions continue to support the oil market against further declines.