Oil prices rose by more than 2% at the end of trading today, Tuesday, July 18 (2023), amid concerns about demand and expectations of a decline in US oil production during next August.
Crude prices faced a noticeable decline in recent sessions, in light of the Chinese economy continuing to achieve weaker-than-expected growth, which does not bode well for oil demand there to recover anytime soon, according to a report published by Reuters, which was seen by the specialized energy platform.
The rise in oil prices coincides with the expectations of the US Energy Information Administration that shale oil production in the United States will decrease by 18 thousand barrels per day during next August, which will be the first drop since December 2022.
Oil prices today
At the end of the session, the prices of benchmark Brent crude futures – for September delivery – 2023, increased by 1.4%, to record $ 79.63 a barrel.
West Texas Intermediate crude – for August 2023 delivery – rose by 2.2%, to record $ 75.75 a barrel, according to figures monitored by the specialized energy platform.
And oil prices fell at the end of trading yesterday, Monday, July 17 (2023), as Brent and West Texas Intermediate crude futures fell slightly less than 2%, amid expectations of a decline in US oil stocks.
It is noteworthy that 4 analysts had expected that US crude oil inventories would decline by about 2.3 million barrels, during the week ending on July 14, at the average level, according to a poll conducted by Reuters.
Oil price analysis
John Rong Yap, a market analyst at IG in Singapore, said that lackluster GDP data released by China on Monday kept a cautious lid on oil prices, with some reservations about a recovery in demand.
“However, there has been some momentum from buyers recently, as prices have broken out of the near-term single pattern over the past week, which could indicate some exhaustion in selling pressures, after the pessimism of the past year,” he added.
At the same time, US shale oil production is expected to decline to approximately 9.40 million barrels per day in August, the first monthly drop since December 2022, data from the US Energy Information Administration showed.
Despite this, global supplies may witness a boost from the resumption of production in the El Feel and Sharara oil fields in Libya, which were closed last week and halted production due to protests over the kidnapping of a former minister.
It is noteworthy that China had announced, yesterday, Monday, July 17, economic data indicating that the gross domestic product grew by 6.3% on an annual basis during the second quarter of this year 2023, which is lower than analysts’ expectations of 7.3%, according to information obtained. It has a specialized power platform.
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