Crude Prices Edge Higher Amid Dollar Weakness and Tight US Oil Supplies
The International Energy Agency's (IEA) latest report tempered these gains, revealing a slowdown in global oil demand growth in Q2, driven by a contraction in Chinese crude demand.
Crude oil and gasoline prices saw moderate gains on Thursday, with August WTI crude oil closing up by 0.64% and August RBOB gasoline rising by 0.58%. A slump in the dollar index to a one-month low bolstered energy prices, while an unexpected decline in weekly US crude inventories provided additional support.
The International Energy Agency's (IEA) latest report tempered these gains, revealing a slowdown in global oil demand growth in Q2, driven by a contraction in Chinese crude demand. However, a report from JPMorgan Chase indicated stronger global oil demand, citing a rebound in US and Chinese air travel and increased fuel use in the Middle East.
Geopolitical factors also influenced crude prices. Reduced crude exports from Russia, ongoing conflicts in the Middle East, and disruptions in the Red Sea shipping routes have tightened global oil supplies. In contrast, higher-than-expected Russian crude output and a rise in floating storage levels exerted downward pressure on prices.
OPEC+ announced plans to gradually restore crude production in Q4, raising concerns about a potential supply glut. Nevertheless, a decrease in OPEC's June crude output provided some support for prices.
Wednesday's EIA report highlighted that US crude oil, gasoline, and distillate inventories remain below their seasonal five-year averages, with US crude production hitting a record high, further influencing market dynamics.
