- Brent and US crude futures extend losses, falling more than $1 in post-settlement trade.
- Softer demand signals and macro uncertainty weigh on prices despite supply constraints.
- Market watches for OPEC+ policy and geopolitical developments for direction.
Oil Prices Slide on Demand Worries
Oil prices extended losses in after-hours trading, with both Brent and US crude futures slipping more than $1 as traders weighed softer demand signals against ongoing supply tightness. The decline reflects growing concerns about slower global growth and lingering inflation risks, which have pressured expectations for oil consumption even as key regions experience supply constraints.
"The market is caught between supply-side tightness and demand-side fragility," said a senior analyst at a major brokerage. "Recent economic data points to a cooling global economy, which is weighing on the outlook for oil demand."
Macro Uncertainty Adds to Pressure
The broader market's risk-on tone has been limited by macro uncertainty ahead of major events, including central bank messaging and geopolitical developments. Investors are hesitant to take on more risk, which has weighed on commodities like oil.
"People are waiting for clarity on the Fed's next move and the trajectory of the global economy," noted a trader. "Until then, it's hard to see sustained upside in prices."
Supply Constraints Persist
Despite the demand concerns, supply-side factors remain supportive. Ongoing production cuts by key OPEC+ members and geopolitical tensions, particularly in the Middle East, continue to limit supply. However, these factors have been overshadowed by the demand narrative in recent sessions.
"We're seeing a tug-of-war between supply and demand drivers," said an energy analyst. "But in the short term, demand worries seem to be winning."
Outlook and Market Watch
Near-term prices are likely to remain under pressure if demand softness persists. However, volatility could spike on any headlines regarding Middle East tensions, Iran-related developments, or shifts in OPEC+ policy. Market participants are keeping a close eye on these factors for direction.
A spokesperson for the International Energy Agency declined to comment on the recent price movements, but data from the agency has shown a mixed picture of global inventories and demand forecasts.
As the market navigates these crosscurrents, traders are advised to stay nimble and watch for catalysts that could shift the balance.
Correction: This article initially misstated the magnitude of the price decline. It has been updated to reflect that futures slipped more than $1, not $2.