Oil prices dropped over 7% due to geopolitical tensions and economic data.

On Monday (October 21),Foreign exchange t Is the r platform legitimate? in the Asian market early trading session, international oil prices experienced slight fluctuations, with U.S. crude currently trading around $68.90 per barrel. Last week, crude oil futures fell by more than 7%, marking the largest weekly drop since September 2023. Brent crude and U.S. crude futures fell by over 1.87% and 2.05%, respectively, mainly due to a slowdown in global economic growth and geopolitical tensions.

The latest data shows that the economic growth of major Asian economies is below expectations, with third-quarter growth hitting a yearly low. The region's refining profits have decreased, and weak fuel demand has led to a reduction in refinery output for the sixth consecutive month. In this economic environment, central banks across Asia have introduced stimulus policies, including large-scale refinancing plans, in an attempt to boost consumption and investment. However, short-term support for energy demand remains limited.

Meanwhile, data from the U.S. Energy Information Administration (EIA) indicates that U.S. crude oil production has reached another record high at 13.5 million barrels per day. While the drop in inventories offers some support to oil prices, the market remains concerned about weak global demand, particularly as the slowdown in Asian economic growth is expected to pressure oil demand.

Geopolitically, tensions from the Middle East remain a significant factor influencing oil prices. The escalation of conflict between Israel and Hezbollah in Lebanon has worsened the situation in specific regions. Although the Biden administration is making efforts to broker temporary reconciliation between Israel and Iran, concerns about the risk of further conflict persist in the market.

Notably, Saudi Arabia's crude oil exports in August fell to their lowest level in a year, at just 5.671 million barrels per day. This factor somewhat limits the downward space for oil prices, but overall, the weak global oil demand situation has not eased. OPEC and the International Energy Agency (IEA) have revised down their forecasts for global oil demand growth in 2024, with a particular emphasis on the significant decline in Asian demand, which is a major drag.

With increasing uncertainty in the global macroeconomic environment, oil prices may continue to be under pressure. Technically, U.S. crude has already broken below the critical support level of $70, with a short-term potential downside to $66.54. Investors should continue to monitor global economic data and developments in the Middle East, especially trends in the Asian market, which will determine future oil price fluctuations.

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The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.

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