Home Business News Oil is stable at the beginning of the week

Oil markets are witnessing quiet trading at the beginning of the week, after the notable gains of last week. While both crude oil prices fell slightly by about 0.6% at approximately 10:30 a.m. GMT.

This quiet trading in the oil markets this morning comes with the Chinese and Japanese markets on holiday, in addition to the state of fear of a possible escalation of military actions in the Middle East after the developments over the weekend.

The focus now turns to developments in the Middle East, where there are concerns about the safety of civilians in Rafah, one of the most densely populated area in the world, and talk of the possibility of ground operations expanding there.

Rafah houses displaced people from the northern Gaza Strip and is now filled with refugee camps. This is what prompted warnings about the safety of civilians there from the White House itself. Therefore, the unprecedented escalation there may motivate actors in the region to expand their operations on various aspects and among global supply chains.

Joe Biden doesn’t want this kind of escalations for fear that it will in turn harm US interests or lose more lives of his citizens and ignite more conflicts during the election season.

This week will also be full of important data, including the inflation reading for January, with expectations that it will slow to its lowest pace in nearly two years, at 2.9% on an annual basis. We also await retail data and the Producer Price Index.

This week’s data will help markets strengthen their expectations about the potential steps of the Federal Reserve in its upcoming meetings. While stronger than expected readings may reinforce expectations that the Fed will not cut rates in March and may also reduce the possibility of a cut even in May.

This in turn means a longer period of growth and weak demand and thus more pressure on oil markets, which are already suffering from weak demand from China.

Leave a Comment

You may also like

CLOSE AD

Sign up to our daily news alerts

[ms-form id=1]