Oil prices have taken a hit this week as economic concerns continue to dominate the markets. Despite expectations of tight supply, investors are worried about global growth due to ongoing trade tensions and slowing economies in some major countries.
The price of Brent crude oil dropped by 1% on Monday morning after falling 3% last week, while US West Texas Intermediate (WTI) fell 0.8%. This is the fourth consecutive weekly decline for both benchmarks and brings them back near their lowest levels since early December 2018.
Analysts believe that oil demand will remain weak until there is more clarity surrounding key geopolitical issues, such as Brexit and US-China trade relations, which could take months or even years to resolve. Additionally, with OPEC+ production cuts set to expire at the end of June 2019, there may be an oversupply issue if they are not extended further into 2020 or beyond.
In conclusion, it appears that until these issues are resolved then we can expect continued volatility in oil prices due to economic uncertainty dominating markets globally.