Due to the unclear demand and supply forecast in the global commodities market, oil prices fell in the middle of the week. Weak economic figures from China indicate that demand may decline. Nonetheless, it is anticipated that demand in the US will increase in the wake of encouraging economic reports.
The supply of crude oil could be hindered by geopolitical instability in the face of rising global energy prices. The closing price of the previous trading session, which was $83.73 per barrel, was 0.2% lower for the international benchmark Brent crude, which was trading at $83.56 per barrel.
Prior to the price decline over the weekend, Brent had reached $87 per barrel earlier in the week. At the same time, the U.S. benchmark West Texas Intermediate (WTI) was trading at $79.60 per barrel, down 0.1% from the previous session’s closing price of $79.71.
According to official data released on Monday, the gross domestic product (GDP) of China fell short of expectations in the second quarter, growing by 4.7% compared to the same period last year.
Meanwhile, retail sales in China, the world’s largest oil exporter, increased by 2%, the slowest increase recorded since December 2022. Weak economic data from China, the world’s largest crude importer, supported downward price movements, fueling market players’ demand fears.
However, the fall in US commercial crude oil reserves, which reflect market perceptions of strengthening domestic demand, limited downward price movements.
Data released on Tuesday by the American Petroleum Institute (API) showed a decrease of 4.4 million barrels in US crude oil inventories, against the market prediction of a 1.9 million barrel draw.
Later in the day, the Energy Information Administration (EIA) will disclose official figures. If the EIA confirms a decline in gasoline and crude oil stockpiles, prices are predicted to rise even higher.
Moreover, ongoing conflicts in the Middle East, home to most of the global oil reserves, continue to influence upward price movements. Israeli warplanes targeted a house in the Al-Manara neighborhood of Khan Younis in the southern Gaza Strip late Tuesday, with no immediate reports of injuries.
Earlier, an Israeli strike hit a residential apartment in the Tel al-Hawa neighborhood southwest of Gaza City. The local civil defense agency said the attack did not result in injuries.
Israeli fighter jets also struck a house in the Nuseirat refugee camp in central Gaza, killing five Palestinians, according to medical sources cited by Anadolu.
