Oil market plunged on easing Middle East tension, stronger US dollar
The potential for a ceasefire in Gaza following US officials' optimistic statements about imminent peace negotiations, overshadowed market sentiment. The easing of Middle East tensions, traditionally a driver of oil price volatility, contributed to the market's sharp downturn.
Crude oil prices plummeted on Friday, 19 July 2024, as the market reacted to diminishing geopolitical risks and a robust US dollar. International benchmarks for oil saw significant declines, with Brent crude falling by $2.48 (2.9%) to $82.63/barrel and WTI dropping $2.69 (3.3%) to $80.13/barrel.
The potential for a ceasefire in Gaza following US officials' optimistic statements about imminent peace negotiations, overshadowed market sentiment. The easing of Middle East tensions, traditionally a driver of oil price volatility, contributed to the market's sharp downturn.
Additionally, the US dollar's strength, driven by unexpectedly positive labor market and manufacturing data, further pressured oil prices. A stronger dollar reduces the appeal of oil as an investment for international buyers, exacerbating the downward price trend.
Written by: Rochelle Nguyen