September 9, 2024 (Investorideas.com Newswire) Crude Oil prices closed lower last Friday, recording significant losses throughout the week. This was mainly due to concerns about a possible slowdown in crude demand following the release of a U.S. jobs report that showed lower-than-expected job creation for August. West Texas Intermediate (WTI) dropped more than 2.00% to $67.20 per barrel, while Brent fell over 2.20% to $70.60.
The weak U.S. employment report raised expectations of a potential response from the Federal Reserve, which might opt for a more aggressive interest rate cut. This would affect the U.S. economy and global oil demand, as a weaker economy tends to consume fewer energy resources. Uncertainty about the global economic recovery continues to weigh on crude prices.
Another key factor in the price drop was the OPEC+ decision to delay an increase in oil production. This group, consisting of the world's major oil-exporting countries, aims to maintain market balance amid current volatility. The decision not to boost supply reflects concerns about weak demand, which might not absorb an increase in production.
On the geopolitical front, tensions between the U.S., Europe, and Iran also influenced the oil market. Western powers have begun working on imposing new sanctions against Iran in response to the country's missile shipments to Russia. This geopolitical conflict could have significant implications for the stability of energy markets, especially if sanctions against one of the world's leading oil producers escalate.
In conclusion, combining economic and geopolitical factors has created uncertainty in oil markets, reflected in the price drop and weekly losses. In the short term, the Federal Reserve's decisions and the evolution of geopolitical tensions will remain crucial elements influencing the direction of crude prices.
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