Oil prices witnessed a decline, at the beginning of Asian trading today, Monday, July 10, amid anticipation of US and Chinese economic data this week.
Expected cuts in crude oil supplies from Saudi Arabia and Russia helped limit losses.
At the beginning of this month, Saudi Arabia announced the extension of the additional reduction in oil production by one million barrels per day, until the end of August, with the possibility of extending it, according to what was seen by the specialized energy platform.
Russia also decided to voluntarily reduce oil exports by 500,000 barrels per day during the month of August, in an attempt to support the balance and stability of the global market.
A government source said on Friday, July 7 (2023), that Russia will use crude oil to produce more fuel to meet domestic demand, instead of cutting production.
Oil prices today
By 06:42 AM GMT (09:42 AM Mecca time), Brent crude futures – for September delivery 2023 – fell 0.68%, to $ 77.94 a barrel.
US West Texas Intermediate crude futures – August 2023 delivery – fell by 0.70%, to $73.34 a barrel, according to figures monitored by the specialized energy platform.
And oil prices ended their trading, on Friday, July 7, with an increase of more than 3%, to achieve its second weekly gain, amid fears of a shortage of supplies.
Both benchmarks (Brent and West Texas Intermediate) rose by about 4% and 4.6%, respectively, during the past week.
Oil price analysis
Analyst at CMC Markets, Tina Ting, said that the caution of oil traders may be in anticipation of the release of the consumer price index in the United States and economic data in China this week.
However, I expected oil prices to rebound after OPEC+ announced plans to further cut supply, according to Reuters.
Today, Monday, July 10 (2023), government data showed that the factory gate in China shrank at the fastest rate in more than 7 years during the month of June; The momentum of economic recovery slowed in the world’s second largest economy.
Mukesh Sahdev, head of refining and marketing operations at Rystad Energy, said that the presence of an economic slowdown in China increases the uncertainty prevailing in the oil market.
He added, “The instability of the market is driven by the ongoing conflict between fears of Western economies controlling demand, and strategies to control supply by OPEC, which affects the balance of the oil market.”
Saudi cut
The Saudi decision to cut crude oil production contributes to easing an oil glut, with floating stocks off Egypt’s Red Sea port of Ain Sukhna halving, to 10.5 million barrels, since mid-June, according to data from oil analytics firm Fortesca as of July 7.
JP Morgan analysts said, in a note, that supplies from outside OPEC+ are keeping pace with global demand, and that OPEC+ needs to increase cuts by another 700,000 barrels in the second half of the year.
In the United States, data on Friday, July 7 (2023) showed that wage growth remains strong and there is a slight decline in the unemployment rate this week; This makes it likely that the Federal Reserve will remain on track to raise interest rates at the next July meeting.
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