Crude oil prices fell -3.48% to $68.80 per barrel as Middle East worries momentarily subsided. Concerns were aroused as Israel increased its ground operations in Gaza, but for the time being they have receded. Investor attention is now focused on a packed week of central bank meetings and economic data. Important economic data from China and the US, as well as key monetary policy decisions from the Fed, BoJ, and BoE, will influence demand prospects.
As demand declines due to slower economic growth, the World Bank projects that global oil prices will average $90 per barrel in the fourth quarter of 2023 and then drop to an average of $81 in 2023. The World Bank, however, issues a warning, stating that a major increase in the Middle East conflict could result in a sharp rise in oil prices.
In contrast to other commodities, oil prices have increased just slightly since the Israel-Hamas conflict began, despite the geopolitical tensions. The U.S. Energy Information Administration has revised down its estimate for 2023 and dropped its forecast for the rise of the global oil demand in 2024 as a result of market uncertainties.
