– But economic slowdown limits gains
Lagos — Crude oil futures rebounded amid rising tensions in the Middle East. US operations against Yemen’s Houthis could leave traders on edge. The geopolitical risks could support oil prices in the short term, but the market could remain cautious in the face of the uncertainty regarding the long-term impact.
However, broader economic concerns continue to weigh on oil prices. Fears of a global economic slowdown resurfaced, worsened by escalating trade tensions between the U.S. and major economies. Data from China showed slower industrial output growth and only modest improvement in retail sales, which raised concerns over weaker demand from one of the world’s largest consumers. While China’s economic stimulus efforts could provide some support, the ongoing trade uncertainty risks dampening sentiment.
Furthermore, U.S. consumer sentiment has declined, and inflation remains a concern. This combination of factors adds pressure to oil prices. The outlook for crude prices remains mixed, with short-term movements mostly constrained by economic uncertainty and weaker global demand, limiting the potential for a breakout above USD 70 per barrel.
*Milad Azar Market Analyst at XTB MENA
