Oil prices declined on Tuesday, snapping a five-day winning streak following the release of the International Energy Agency’s (IEA) monthly report. U.S. benchmark West Texas Intermediate slipped below $80 per barrel.
While oil prices were previously propped up by fears of an escalation in the Middle East conflict, specifically between Israel and Iran, the IEA’s report has since come to the forefront of investors’ consciousness. According to the report, the ongoing oil inventory declines affecting the global market are expected to subside during the final quarter of the year.
“I actually don’t think the increase in Middle Eastern tensions, even if that were to transpire into attacks, will lead to prices significantly higher,” Amrita Sen, director of research at consultants Energy Aspects Ltd. claimed. Sen expects that they will only be affected if a supply outage actually materializes.
Another macroeconomic concern that has directly affected the trajectory of oil prices, particularly crude, is the economic health of the United States and China, with observers awaiting further trade data from both superpowers in order to determine their economic trajectories. After data showed a record low amount of bullish bets on crude, it appears that there is now room for some recovery.