Oil markets experienced a downturn today as both crude oil and gasoline prices fell, influenced by a strengthening dollar and tempered optimism regarding U.S. trade negotiations. According to a recent report, September WTI crude oil (CLU25) dropped by -0.48 (-0.73%), while September RBOB gasoline (RBU25) decreased by -0.0029 (-0.14%).
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Global economic indicators further weighed on energy demand, with U.S. capital goods new orders unexpectedly declining by -0.7% in June, contrary to the anticipated +0.1% increase. Meanwhile, the UK reported a +0.6% rise in retail sales excluding auto fuel for June, falling short of the expected +1.2% growth.
Adding to the pressure on crude prices, Iraq is set to resume oil exports from its northern Kurdish region through the Iraq-Turkey pipeline, potentially supplying 230,000 barrels per day (bpd) to the market. This development comes as Iraq, the second-largest oil producer in OPEC, plans to boost its crude exports.
On the geopolitical front, the European Union’s recent sanctions on Russian oil, targeting over 400 ships and several banks, provided some support for oil prices. However, concerns about a global oil surplus persist, especially after OPEC+ announced plans to increase crude production by 548,000 bpd starting August 1, with potential further hikes on the horizon.
In contrast, a decline in crude oil stored on stationary tankers, down by 14% to 66.31 million barrels, offers a bullish outlook for oil prices. Additionally, the U.S. Energy Information Administration reported a decrease in U.S. crude oil production and a drop in active oil rigs to a 3.75-year low of 422, signaling potential supply constraints.