Oil prices fell by about half a percentage point in early trading on Wednesday, amid concerns about global demand due to weak economic momentum in China and dwindling hopes for a cut in US interest rates in the near term. Brent crude futures for June delivery fell 51 cents, or 0.57 percent, to $89.51 per barrel by 0430 GMT, while US crude futures for May delivery fell 58 cents, or 0.7 percent, to $84.79 per barrel.

This decrease is due to several factors, the most prominent of which are:
● Demand concerns: The Chinese economy, the world's largest oil importer, is experiencing a slowdown; Which affects the global demand for oil.
● Postponing US interest rate cuts: Jerome Powell, Chairman of the Federal Reserve (US central bank), announced that a series of disappointing data showing stronger-than-expected inflation means that the Fed will likely need longer than previously thought to become confident that inflation On its way to the two percent level.
● Increase in US crude oil inventories: American Petroleum Institute figures showed yesterday, Tuesday, that US crude oil inventories rose more last week than analysts polled by Reuters expected.
Although geopolitical tensions in the Middle East have escalated following the Iranian attack on Israel, their impact on oil prices is limited at the present time. The Israeli War Cabinet postponed until today its third meeting to decide on a response to the attack, while the Western allies seek to quickly impose new sanctions on Tehran with the aim of discouraging Israel from a major escalation in the Middle East. According to analysts, the Iranian attack is unlikely to trigger major oil sanctions on Iran, due to concerns about raising oil prices and angering China.

Concerns about global oil demand remain the main factor determining the direction of prices at the moment. The price of WTI is expected to range between $83 and $88 without any new developments.

The US Energy Information Administration, the statistical arm of the US Department of Energy, will release its official data on oil inventories today, which may influence the path of prices in the future.