Oil prices rose at the close of trading today, Thursday, July 20 (2023), exceeding the losses incurred in the previous session, in light of the uncertainty about demand and profit-taking operations.
A smaller-than-expected decline in US oil inventories and the possibility of a weaker demand outlook kept investors wary.
US oil inventories decreased less than expected during the past week, after rising for the first time in 4 weeks, and gasoline stocks also declined, according to the weekly report issued by the US Energy Information Administration, yesterday, Wednesday, July 19, 2023.
Oil prices today
At the end of the session, the price of futures contracts for Brent crude oil – delivery in September 2023 – increased by 0.22% ($ 0.18), to reach $ 79.64 a barrel.
West Texas Intermediate crude – for August 2023 delivery – rose 0.4%, to record $75.63 a barrel, according to figures monitored by the specialized energy platform.
And oil prices ended their trading, yesterday, Wednesday, July 19, in decline, amid fears of an economic recession with a shortage of supplies, and the release of US oil inventories data.
Oil price analysis
“After some heavy selling pressure overnight, there is an attempt to stabilize oil prices this morning,” said IG Market Strategist, Yip Jun Rong, according to Reuters.
Oil prices fell in the previous session; Investors indulged in profit-taking after data showed US inventories fell less than analysts expected.
Meanwhile, the US dollar index remained unchanged, down 0.2%. The outlook for demand in China, the world’s largest crude buyer, was also unclear amid a slowing economy.
However, on Tuesday, China’s top economic planner pledged that it would implement policies to “restore and expand” consumption in the world’s second-largest economy; What may boost the demand for oil; Consumers’ purchasing power remained weak.
demand for oil
Citigroup analysts said, in a note, that crude oil prices may struggle to find a clear direction amid the mixed global demand outlook in the next few weeks.
Analysts added that demand sees “a mixed picture, with increased demand for gasoline and jet fuel, but petrochemical and diesel prices weaker.”
Citigroup analysts noted that Brent crude prices broke out of a higher range through July, after being stuck in the $72-$78 range during May and June, buoyed by Saudi production cuts and geopolitical risks.
Saudi Arabia announced the extension of the voluntary production cut of one million barrels of oil per day, which began in July, to next August, with the possibility of extending it again.
Under Riyadh’s voluntary reduction pledge; Saudi Arabia’s oil production, in August 2023, is scheduled to reach approximately 9 million barrels per day.
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