Why are oil prices down today?

Oil prices are witnessing a downturn finally to bring a respite around the whole world. Brent crude futures is down by over 1%. It has hovered near the $105 per barrel mark. US President Donald Trump has said that he was not willing to ease sanctions yet and release frozen funds as "concrete" steps regarding Iran's nuclear program.

The yield on the benchmark 10-year Treasury bond has hovered near its highest level since 2007. It shows market expectations for tighter monetary policy in the future. The high energy prices and the possibility of central banks' interest rate hikes have hit the global markets hard.





Kyle Rodda, senior financial market analyst, Capital.com said, "The markets are waiting for a breakthrough, or at least clarity, regarding the war. That would support sentiment. But it's unlikely to arrive any time soon."

The spot silver is also down by around 1% to $60.78. The platinum price has slipped by 1.1% to $1,697.73, while palladium price has increased by 1.4% to $1,231.53. After hitting a more-than-seven-week low in the previous session, gold prices in contrast have bounced back on Tuesday. As of 1136 GMT, spot gold has climbed 1.1% to reach $4,158.28 per ounce. US gold futures is also up by 0.5% to $4,190.10.




Investors are now watching closely for US economic data that could offer clues on the Federal Reserve's interest rate outlook. Ricardo Evangelista, Director and CEO, ActivTrades said, "Today's modest recovery looks like a rebound following yesterday's sharp sell-off, rather than a fundamental change in sentiment."

In addition to the remarks from several Fed policymakers, investors are currently looking for important economic data. It includes Wednesday's ADP employment data and the PCE data. According to the CME's FedWatch Tool, the markets see an approximately 68% probability of a Fed rate rise in October and a 95% chance of an hike in December currently.