Crude Oil Prices Rebound After Yesterday's Fall

Crude oil futures edged higher on Wednesday morning, reflecting the continued volatility in the global market driven by concerns over potential disruptions in West Asia. This follows a sharp decline of more than 4% during Tuesday’s session, as traders reacted to developments in the region.
By 11:39 a.m. Wednesday, Brent crude futures for December delivery were trading at $74.50 per barrel, marking a 0.34% increase. Similarly, November futures for West Texas Intermediate (WTI) saw a 0.40% rise, reaching $70.86 per barrel.
On India's Multi Commodity Exchange (MCX), crude oil futures mirrored the upward trend. October contracts were priced at ₹5950, up 0.47% from their previous close of ₹5923. November contracts rose by 0.56% to ₹5932 from ₹5897 at the previous session's close.
The market is currently reacting to mixed signals from geopolitical developments in West Asia. Media reports on Tuesday suggested that Israel might refrain from targeting Iran’s nuclear and oil infrastructure, instead focusing on military objectives. This eased concerns about potential disruptions to oil supply from Iran, a major crude producer. Consequently, the drop in oil prices earlier in the week reflected a more cautious stance from market participants.
However, uncertainty remains. Israeli Prime Minister Benjamin Netanyahu reiterated Israel’s right to respond to any aggression from Iran, keeping the situation tense and leaving the market on edge.
In the backdrop of these geopolitical tensions, the International Energy Agency (IEA) released its October Oil Market Report, offering a less optimistic outlook for global oil demand. The IEA projected that oil demand would grow by approximately 900,000 barrels per day in 2024 and just under 1 million barrels per day in 2025. This is a notable slowdown compared to the rapid recovery seen in 2022-2023 when demand grew by around 2 million barrels per day following the pandemic.
China, the world's second-largest oil consumer, plays a significant role in this deceleration. According to the IEA, China will contribute around 20% of global demand growth this year and in 2024, a stark contrast to the 70% it contributed in 2023.
With geopolitical tensions and softer demand outlooks weighing on the market, crude oil prices may continue to fluctuate as investors monitor both regional developments and global economic trends.