Global oil prices per barrel have recently declined, possibly due to technical corrections and weak trading caused by Presidents' Day holiday in the United States. WTI prices reached around $77.80 per barrel during Asian trading hours on Monday. Market participants are expected to monitor demand in China following the week-long holiday.

Crude oil faces challenges due to expectations that the Federal Reserve (Fed) will maintain current interest rates, especially after complex data from the previous week. Market sentiment strengthened due to higher consumer prices and declining retail sales, indicating a low likelihood of a rate cut by the Fed in March and May. The CME FedWatch Tool shows about a 52% chance of a 25 basis point rate cut in June.

Geopolitical tensions continue in the Middle East after Israeli military strikes hit the second largest hospital in Gaza, leading to the hospital's operational shutdown, according to the UN. Israel hinted at possible further military action in southern Gaza City. Meanwhile, Iran-backed Houthi fighters attacked oil vessels bound for India.

The IEA has downgraded its forecast for global oil demand growth for 2024 in its latest report. This slowdown is partly due to developments in China.

The report highlights the tightening of the oil market balance in January, mainly due to supply disruptions in the United States and Canada. Although OPEC+ countries have cut production, the IEA expects a slight increase in inventories in the first quarter of this year.

Also Read: Global Crude Oil Strengthens at $76.00 Due to Bullish Dollar

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