Dollar Strength Impacts Oil Prices
The U.S. dollar firmed following an attempted assassination of former President Donald Trump, affecting oil prices. A stronger dollar typically makes oil more expensive for buyers using other currencies, potentially dampening demand.
Chinese Economic Slowdown
China’s economic data revealed a slowdown, with GDP growth of 4.7% in Q2 2024 – the slowest since Q1 2023. This deceleration, coupled with a 2.3% drop in crude oil imports during H1 2024, raised concerns about demand from the world’s second-largest economy.
UBS analyst Giovanni Staunovo noted that Chinese data, including refinery runs and crude imports, were not supportive of oil prices. However, he added that “demand growth elsewhere is still healthy.”
OPEC+ Supply Cuts Support Market
Despite bearish factors, OPEC+ supply cuts continue to underpin the oil market. Iraq’s recent commitment to compensate for overproduction since early 2024 further reinforces this support.
Geopolitical Tensions
The volatile situation in the Middle East provides a geopolitical premium for oil prices. However, ample spare capacity held by Saudi Arabia and other OPEC members has limited this upward pressure.
Recent Price Movements
Crude oil prices fell last week after four consecutive weeks of gains. The initial optimism about strong U.S. summer demand was countered by growing concerns over Chinese consumption.
Read More: Crude Oil News Today: Chinese Slowdown Weighs While OPEC+ Cuts Support