The oil prices fell more than $1 on Friday, with the Brent plummeting below $80 a barrel after a series of gloomy July indicators from the China overshadowed geopolitical risks to available supply.
The futures of the Brent fell $1.36, or 1.7%, to close at $79.68 a barrel, while U.S. crude oil prices fell West Texas Intermediate (WTI) fell $1.51, or 1.9%, to $76.65. Last week, Brent closed at $79.66 a barrel and WTI at $76.84.
“The oil market is struggling to hold its recently regained floor of $80 a barrel as the recent spate of weak macroeconomic indicators reaffirm their downward pressure while geopolitical concerns appear to fade into the background,” he told Reuters. Harry Chilinguirianhead of research at Onyx Capital Group.
“The shape of the futures curve Brent crude is also turning lower this morning as the market reassesses relative crude availability in light of disappointing crude import and refinery figures. China”, he added.
Backsliding occurs when spot prices are higher than future prices, giving energy companies little incentive to pay to store fuel. Meanwhile, in China, refineries drastically reduced their crude oil processing rates last month due to tepid fuel demand.
In parallel, the Organization of the Petroleum Exporting Countries (OPEC) cut its profits on Monday demand outlook for this year, citing weaker expectations for China.
However, according to analysts, the real breakout from range-bound Brent crude prices, and potentially firmer, will likely come when the United States Federal Reserve (Fed) decide whether or not to cut interest rates at its September meeting.
Greater calm at the geopolitical level
The data of retail sales Thursday’s U.S. unemployment benefits provided a floor for prices and beat analysts’ expectations, while separate data showed fewer Americans had filed new claims for unemployment benefits. unemployment last week, sparking renewed optimism about the country’s economic growth.
“The decrease in concerns about the recession “In the US, the slowdown in crude oil prices has helped crude bulls this week, with better-than-expected retail sales and jobless claims figures allaying fears of a faster-than-expected deterioration in US economic conditions,” he said. Michael Brown, Senior Research Strategist at Pepperstone.
As for the geopolitical risks persistent, a new round of negotiations began on Thursday to secure a ceasefire in the war Loop, even as Israeli troops continued their assault on the Palestinian enclave.
The talks, which have been boycotted by Hamas, were extended and will resume on Friday in Doha, the capital of Qatar.
Source: Ambito
