Advertisements

Oil Prices Poised for Third Straight Weekly Decline

by Krystal

Crude oil prices are set to experience a third consecutive weekly decline, primarily due to concerns over weaker-than-expected demand from China.

Earlier in the week, oil prices saw some gains, thanks to significant inventory reductions reported by the American Petroleum Institute and the Energy Information Administration. Additionally, the U.S. Commerce Department’s report of a 2.8% GDP growth for the second quarter boosted oil prices. This growth was attributed to increased consumer spending and business investment.

Advertisements

Later today, the Federal Reserve will release personal consumption expenditure (PCE) data, which is a key inflation measure closely watched by the U.S. central bank. Oil prices are being supported by optimistic expectations that this data will be positive, potentially increasing hopes for an interest rate cut in September.

Advertisements

However, Goldman Sachs analysts have warned that weak demand and slower GDP growth next year could lead to a $11 drop in oil prices if new U.S. tariffs on imports are imposed. The decline could reach $19 per barrel if the Fed delays rate cuts until after 2025 due to persistent inflation.

Advertisements

SEE ALSO: Who Owns OPEC Oil?

Advertisements

Additionally, some market watchers are anticipating an increase in OPEC supply in the latter half of the year. Bloomberg reports that there is uncertainty about whether OPEC will ease its production cuts next quarter. OPEC has hinted it might reduce some production limits, but only if prices meet their targets. With prices falling, it is unlikely that OPEC will increase supply, as this could further pressure prices and undermine the purpose of the current cuts.

Advertisements
Advertisements

You may also like

oftrb logo

Oftrb.com is a comprehensive energy portal, the main columns include crude oil prices, energy categories, EIA, OPEC, crude oil news, basic knowledge of crude oil, etc.

【Contact us: [email protected]

© 2023 Copyright oftrb.com – Crude Oil Market Quotes, Price Chart live & News [[email protected]]