Oil Prices Dip as Geopolitical Fears Drive Market Volatility
Oil prices declined on Friday after posting double-digit weekly gains above $100 per barrel for the first time in months.
The front-month Brent crude oil futures, the global benchmark, were down 3.58% to trade at $103.78 a barrel as of 6:27 a.m. ET, while West Texas Intermediate futures, their U.S. counterpart, dropped by 2.17% to $99.23 per barrel.
The decline snapped five consecutive days of gains for Brent crude and an eight-day winning streak for WTI, which are both on course for a weekly gain of nearly 10%. The markets' concerns about a protracted Iran war and escalating conflict in the Middle East contributed to the price drop.
According to Deutsche Bank's Jim Reid, 'Once again, it is geopolitical fears driving everything.' He also noted that the current supply deficit could be either structural or transitory, with Tamas Varga, an analyst at PVM Oil Associates, stating that further spikes cannot be ruled out but would likely be short-lived due to increasing demand destruction and the growth of renewable energy sources.