Crude oil prices fell by -0.78% to end at 6746, under pressure from worries about how rising Middle East tension and a strong US dollar might affect the world’s oil consumption. The concerns about disruptions to the oil supply have been made worse by the geopolitical tensions in the Middle East, including the Israeli troops’ advance into Gaza and the fears of a possible “all-out war” with Hezbollah in Lebanon.
Strong global demand growth predictions from OPEC, the IEA, and the US EIA indicate solid demand in the second half of the year have recently sustained oil prices despite these tensions. Important members of OPEC+, including Iraq and Russia, have reiterated their support for production quotas. At the same time, Saudi Arabia has indicated that it is willing to modify output in response to market trends.
The announcement by OPEC+ to boost output beginning in October has improved investor mood, with expectations of higher prices in the future due to increased demand. The U.S. Energy Information Administration (EIA) statistics, which grew by 1.9 million barrels per day in the week ending June 14 to reach 21.1 million bpd, demonstrated a notable increase in the total product delivered, further boosting the market. Furthermore, the market was not expecting a 2 million barrel reduction; instead, U.S. crude oil stocks dropped by 2.547 million barrels.
