Geopolitical Tensions Impact Oil Price Volatility

Oil prices have recently experienced volatility due to geopolitical tensions in the Middle East and economic factors in China. After a significant drop, prices slightly rebounded as Israel asserted its autonomy in deciding counter-strikes against Iran, raising concerns about potential impacts on energy infrastructure. The International Energy Agency (IEA) and OPEC have both revised down their global oil demand growth forecasts for 2024, highlighting China's weaker than expected demand and broader economic challenges. The IEA predicts a global oil surplus by 2025 if no major supply disruptions occur, while OPEC anticipates slower demand growth due to the transition to cleaner fuels and economic headwinds. Despite the bearish demand outlook, market participants are closely monitoring the situation in light of Chinese fiscal policies and Middle Eastern geopolitical developments.