Crude oil extended losses on Wednesday amid worries about global demand as China's economic momentum weakened and demand in US commercial stocks soured due to the conflict in the Middle East.
Meanwhile, Brent crude oil prices for June fell 40 cents (0.44%) to $89.62 a barrel and WTI prices for May fell 48 cents (0.56%) to $84.88 a barrel.
Oil prices have declined so far this week as the economic situation puts pressure on investors. It also curbed gains from geopolitical tensions with markets now looking at how Israel might respond to recent Iranian attacks.
In China, the world's largest oil importer, the economy grew faster than expected in the first quarter of 2024. However, some data for March such as real estate investment, retail sales and industrial output showed that domestic demand remained weak.
In the Middle East, a third meeting of Israel's war cabinet set for Tuesday to decide on a response to Iran's first direct attack was postponed until today. The United States remains to call on both countries to return to easing tensions in the Middle East.
Analysts, however, do not expect Iran's unprecedented missile and drone attacks on Israel to prompt dramatic sanctions on Iran's oil exports from the Biden administration.
The US government could now reimpose an oil embargo on Venezuela on Thursday which could further tighten supply in the market.
WTI price movements in the short term are likely to be stuck in a narrow range between $83.20 to $87.70 due to conflicting factors such as China's disappointing retail sales in March and the geopolitical risk premium still remaining.
