(Bloomberg) — Oil held a two-day drop, with traders assessing the outlook for global interest rates and geopolitical tensions in the Middle East.
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West Texas Intermediate for May traded below $81, after that contract shed 2% over the prior two days. Brent crude closed below $86. A surprise rate cut from the Swiss National Bank boosted the US dollar, a headwind for commodities.
In the Middle East, meanwhile, Israel said it would invade Rafah, potentially escalating regional tensions, as it battles Iran-backed Hamas in the Gaza Strip. Separately, the Houthis in Yemen assured China and Russia their vessels in the Red Sea wouldn’t be targeted.
Crude has advanced in the first quarter, having broken out of a narrow range in recent weeks as OPEC+ extended production cuts and Ukrainian attacks on Russian territory, including against refineries, intensify. However, gains have been limited by surging supply from outside the group, including from drillers in the US, and a muddy economic outlook in top importer China.
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