LONDON: Oil prices remained near their lowest levels since early June on Tuesday, as concerns over demand in China were countered by promises of economic policy support from the Chinese government and expectations of lower US crude and product inventories.
Market Overview:
- Brent Crude: Rose by 8 cents, or 0.1%, to $79.86 a barrel by 0805 GMT, after dipping intraday to $79.34, the lowest since June 10.
- US Crude: Fell by 12 cents, or 0.2%, to $75.69.
Key Factors:
- Chinese Economic Concerns: Ongoing worries about China’s economic slowdown, with manufacturing activity expected to contract for a third consecutive month in July, have been pressuring commodity prices.
- Chinese Government Response: Although Chinese officials have pledged increased support for the economy, expectations for the impact of these measures have been tempered.
- OPEC+ Meeting: Top ministers from OPEC+ are set to meet on Thursday to review the market and discuss unwinding some output cuts starting in October. No immediate changes are anticipated.
- Middle East Tensions: Oil prices fell by 2% in the previous session due to concerns over potential escalation in the Middle East following a rocket strike in Israeli-occupied Golan Heights.
- Venezuelan Election Impact: The opposition claims victory in Venezuela’s presidential election, which could lead to tighter US sanctions and potentially reduce Venezuela’s oil exports by 100,000-120,000 barrels per day.
- US Inventory Reports: Anticipated reports on US crude and fuel stocks are expected to provide some support to oil prices.
