The prices of the Petroleum fell about 1% on Tuesday, seven-week lows, amid investor concerns about a possible weakening of Chinese demand, while OPEC+ appeared to be will maintain its plans to increase supply.
Market players have been talking for days about a possible ceasefire agreement in Gaza that could reduce the geopolitical risk premium for crude oil prices.
The Brent oil futures crude oil fell $1.15, or 1.4%, to $78.63 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $1.08, or 1.4%, to $74.73. Lower closings for both references since June 5 and kept both contracts technically oversold for the second consecutive day.
US diesel and gasoline futures also closed lower. lowest since early June. Manufacturing activity in China, the world’s largest crude importer, likely contracted for a third straight month in July, a Reuters poll showed.
Chinese leaders have pledged to step up support for the economy, but investors expect such measures to be limited as the Third Plenum meeting largely reiterated existing goals.
The war situation affects the price of crude oil
In Lebanon, an Israeli airstrike hit a Hezbollah’s top command in Beirut’s southern suburbs in what the Israeli military said was retaliation for a cross-border rocket attack at the weekend that killed 12 children and teenagers. Some analysts have said Israel’s measured response could signal that a deal on Gaza is close.
A ceasefire agreement with Hamas has “the potential to remove $4 to $7 (per barrel) of risk premium from the market,” Bob Yawger, director of energy futures at Mizuho, said in a note.
On Thursday, top ministers from OPEC+, the Organization of the Petroleum Exporting Countries (OPEC), and allies such as Russia, will meet to review the market, including a plan to begin unwinding some production cuts. No changes are expected for now.
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Fear of the impact of possible sanctions on Venezuela
US mulls new sanctions against OPEC member Venezuelafollowing the controversial results of the presidential elections.
The victory of President Nicolás Maduro in the last Venezuelan elections “It is a bottleneck for global supply, as this could lead to stricter US sanctions,” ANZ analysts said in a note, estimating that the scenario could reduce Venezuela’s exports by between 100,000 and 120,000 barrels per day.
Source: Ambito
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