Why the Short Term Outlook for Oil Remains Bearish

The crude oil market is currently grappling with heightened volatility, primarily driven by escalating tensions in the Middle East. A notable uptick in oil prices, nearly 1%, was triggered by Iran's seizure of an oil tanker off Oman's coast, amplifying fears of intensifying conflicts in this key oil-producing region. This incident caps a period where oil benchmarks initially increased over $2 a barrel but later faced downward adjustments, influenced by unexpected rises in U.S. inflation and a decrease in China's demand for Saudi oil. The tension…