Oil prices stabilized near a six-week low as market participants awaited fresh insights into supply-demand dynamics, particularly the upcoming US inventory data. Global benchmark Brent crude hovered around $82 per barrel, recovering slightly after a recent decline of more than 3% over two consecutive sessions. Meanwhile, West Texas Intermediate (WTI) traded close to $78 per barrel amidst ongoing concerns over Chinese demand and algorithmic trading activities exacerbating selling pressures.
The American Petroleum Institute (API), a key industry group, is scheduled to release its weekly report on US crude inventories later today, with the government’s official data expected tomorrow. Recent reports indicate a three-week decline in nationwide crude stockpiles, marking the lowest levels since February.
Despite recent declines, oil prices have remained higher year-to-date, buoyed by production cuts implemented by OPEC+ and expectations of potential interest rate cuts by the Federal Reserve as early as September. However, geopolitical uncertainties continue to influence market sentiment, notably with US President Joe Biden’s decision not to seek reelection.
John Evans, an analyst at brokerage firm PVM, commented, “Oil is showing signs of entering a period of stagnation. Canadian wildfires and anticipated reductions in US crude and gasoline stocks are supporting bullish sentiment.” He noted, however, that inconsistent demand signals, import figures, and uncertainties surrounding Chinese economic stimulus measures are tempering expectations for a sustained rally above $90 per barrel for Brent crude.
The oil market remains sensitive to various global factors, and participants are closely monitoring developments that could impact future price movements.
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