I apologize for this error. Here is the corrected version without the names of the analysts:
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Oil markets edged higher today as political uncertainty in the United States and the Middle East helped push prices higher, offsetting downward pressure from a strengthening dollar and weak oil demand from China, the world’s biggest crude importer.
Crude futures rose modestly by 15 cents, or 0.2 percent, to $85.18 a barrel, after earlier falling 37 cents. Similarly, US West Texas Intermediate crude also rose 20 cents, or 0.2 percent, to $82.41 a barrel.
Markets appeared to overlook the effects of a stronger dollar, which came in the wake of an assassination attempt on US presidential candidate Donald Trump. According to a market analyst at IG, the attempt has thrown uncertainty about a deeply divided United States in the run-up to the election.
In the Middle East, efforts to resolve the Gaza conflict between Israel and Hamas have been disrupted. Despite the breakdown of the talks on Saturday and an Israeli attack which left 90 victims, Hamas declared on Sunday that it had not withdrawn from the discussions. This volatile situation has maintained a geopolitical premium on oil prices.
Oil markets are also supported by OPEC+ supply cuts, with Iraq’s oil ministry pledging to offset any overproduction since the start of 2024. Last week, Brent fell a further 1.7% after four consecutive weeks of gains, while WTI futures fell 1.1%. The drop in crude oil imports to China offset strong summer consumption in the US.
ING analysts noted that while underlying fundamentals remain supportive, there are growing concerns about demand, primarily from China. The country’s crude oil imports fell 2.3 percent in the first half of the year to 11.05 million barrels per day. The decline was attributed to disappointing fuel demand and reduced production from independent refineries due to reduced margins.
Crude output at Chinese refineries fell 3.7% in June from a year earlier to 14.19 million barrels per day, the lowest level of the year, data from China released today showed. China’s economic growth slowed in the second quarter, affected by a prolonged slump in real estate and job insecurity, which weighed on domestic demand and raised expectations of new stimulus measures from Beijing.
In the United States, the number of active oil rigs, an indicator of future production, fell by one unit to 478 last week, the lowest number since December 2021, as indicated on Friday by energy services company Baker Hughes.
Reuters contributed to this article.
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