Oil prices drop amid forecasts of rising inventories and weak demand
Search our blog for articles and insights right here, just type your interest and dive into a world of knowledge.
Popular articles
Oil Prices Decline Amidst Focus on Supply and Demand
Oil prices slipped for a third consecutive session on Tuesday, as market participants centered their attention on potential increases in oil supplies and weak demand. The market reacted minimally to the latest developments in the U.S. presidential campaign.
Brent crude futures for September saw a modest decline, falling by 9 cents to $82.31 a barrel by early GMT trading. Similarly, U.S. West Texas Intermediate crude for September dropped 10 cents to $78.30 per barrel.
U.S. Presidential Campaign Has Little Market Impact
Investors largely ignored the political stir caused by U.S. President Joe Biden's decision to withdraw from his reelection campaign, opting to endorse Vice President Kamala Harris instead. Analysts from Citi noted that neither Harris nor the Republican challenger, Donald Trump, are expected to introduce policies that would significantly impact oil and gas operations.
Supply and Demand Take Center Stage
Market sentiment was primarily driven by the dynamics of oil supply and demand. Analysts from Morgan Stanley projected a balancing of the oil market by the fourth quarter of this year, with a surplus anticipated by next year. This could potentially push Brent crude prices down to the mid-to-high $70s per barrel range.
Upcoming Inventory Data
The American Petroleum Institute, a prominent trade organization, is scheduled to release its latest estimates for last week's oil inventories on Tuesday. In addition, official data from U.S. government sources is expected on Wednesday.
A preliminary Reuters poll comprising six analysts indicated that U.S. crude oil stocks likely fell by an average of 2.5 million barrels for the week ending July 19. Gasoline stocks were also estimated to have decreased, albeit by a smaller margin of 500,000 barrels.
The market remains vigilant as these factors unfold, continuously adapting to the evolving landscape of global oil supply and demand dynamics.
