Oil prices remained stable near a six-week low as investors awaited new insights into market dynamics, including the forecast for US crude inventories. Global benchmark Brent crude hovered just above $82 per barrel, maintaining a decline of over 3% from the previous two sessions. Similarly, West Texas Intermediate (WTI) traded near $78 per barrel. This downturn was exacerbated by algorithmic trading sales, which intensified the pressure stemming from uncertainties about Chinese demand.
The American Petroleum Institute, a key industry organization, is set to release its estimate of weekly US inventory changes later today, with the official government report scheduled for the following day. US crude stockpiles have been declining for three consecutive weeks, reaching their lowest levels since February.
Year-to-date, crude oil prices have remained elevated, supported by OPEC+ production cuts and expectations for potential reductions in US interest rates, possibly starting in September. Political uncertainties are also influencing the market, particularly in light of President Joe Biden’s recent decision to withdraw from the presidential race.
Warren Patterson, head of commodities strategy at ING Groep NV in Singapore, commented, “Persistent concerns about Chinese demand, following disappointing data, are putting pressure on oil prices. OPEC+ production cuts should help tighten the market in the current quarter, but the extent of this tightening will largely depend on the trajectory of Chinese demand.”
