Crude Oil Prices Dip Amid Profit-Taking, Stay Near Two-Week Highs

Crude oil prices experienced a slight decline during Monday's trading as investors turned to profit-taking, following strong gains from the previous week. These gains were driven by concerns over potential supply shortages due to escalating global geopolitical tensions.

Crude Oil Price Performance Today

U.S. oil contracts dropped by 0.36%, reaching approximately $70.86 per barrel, while Brent crude contracts fell by 0.23%, trading at $74.88 per barrel.

Reasons Behind the Weakness in Crude Oil Prices

The dip in crude oil prices is attributed to profit-taking by investors, particularly after the significant gains observed last week. In that period, crude oil contracts saw weekly gains of nearly 6%, fueled by worries over a potential supply shortage caused by global geopolitical tensions, particularly the ongoing conflict between Russia and Ukraine.

The surge in crude oil prices last week was driven by heightened tensions between Russia and Ukraine. Ukraine's long-range missile strikes on Russia, using British and American-made missiles, led to a retaliatory medium-range ballistic missile strike by Russia. This exchange of fire raised global fears of a potential world war, with the risk of nuclear escalation among major powers.

In addition, the International Atomic Energy Agency (IAEA) took a significant step by requiring Iran to increase its cooperation. In response, Tehran activated new centrifuges for uranium enrichment, which fueled concerns of fresh U.S. sanctions targeting Iran's oil sector.

On a more optimistic note, reports emerged that China had issued additional crude oil import quotas for independent refineries, amounting to at least 5.84 million tons per day. These shipments are set to be delivered by the end of this year and into early next year, supporting the view of strong Chinese demand in the coming months.

Other Commodity Contracts

In other commodity markets, heating oil contracts fell by 0.16%, reaching around $2.2808, while gasoline contracts dropped by 0.69%, settling at approximately $2.0012. Meanwhile, natural gas contracts saw an increase of 5.17%, trading at $3.457 per million British thermal units.

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