Global oil prices edged lower on Monday as traders reacted to mixed signals in the energy market, fresh demand concerns, and ongoing volatility in the global economy.
Brent crude, the international benchmark, dropped $0.57 or 0.90% to settle at $62.78 per barrel, continuing a recent downtrend fueled by uncertain global demand outlooks.
West Texas Intermediate (WTI), the U.S. benchmark, also dipped $0.15, falling 0.25% to $60.79 per barrel, hovering just above the psychologically important $60 level.
Meanwhile, Murban crude, the UAE benchmark commonly traded in Asia, recorded the sharpest decline of the major crude grades, falling $0.72 or 1.15% to $62.11 per barrel.
Natural Gas Plunges Over 2%
Natural gas prices also faced significant losses, with futures sliding 2.13% to $3.447 per million British thermal units (MMBtu). Analysts attribute the fall to higher-than-expected inventories and tepid demand forecasts amid mild seasonal weather in key consuming regions.
What’s Driving the Market?
Traders pointed to several bearish factors influencing the latest price movements:
- Lukewarm Chinese demand despite stimulus efforts
- Rising U.S. inventories that signaled supply may outpace short-term demand
- OPEC+ production discussions expected to result in higher July output, adding downward pressure
- Macroeconomic uncertainty, including U.S. interest rate policies and persistent inflation concerns
Oil market volatility has increased ahead of key data releases and geopolitical negotiations, with many investors shifting to a cautious stance.
Outlook Remains Mixed
Analysts say the oil market could face more pressure if supply continues to rise without matching demand. While summer travel season in the Northern Hemisphere typically boosts fuel use, gains may be capped if refinery demand weakens or if the global economic recovery stalls.