Oil prices stabilized from sharp losses suffered during the middle of yesterday's trading session. The reasons this occurred was due to ongoing concerns about the deterioration in the U.S. labor market. This led prices to fall over $2 to $40.50 a barrel during the middle of yesterday's trading session. The recovery later-on, which led prices to close slightly down 30 pips to 42.37 on Thursday, was due to the prolonged conflict in Gaza and the Russia-Ukraine gas dispute returning to the minds of investors.
Crude has continued to decline from what was a rally at the beginning of the week. Oil prices reached over $50 on Tuesday. However, they declined by over $6 on Wednesday, because of the release of U.S. Crude Oil Inventories, which showed an increase of 6.7 million barrels from the previous week. This was far higher than the forecasted 0.5 million barrels. Therefore, in hindsight the result was obvious: a steep decline in Oil prices.
At the moment, the main factors that are preventing the price of Crude falling below $40 a barrel are the Gaza war and Russia-Ukraine energy dispute. Once these two issues are resolved, then the price of Crude Oil is likely to fall dramatically.