Crude oil prices dropped by -0.75% yesterday, finishing at 6771, under pressure from a stronger dollar and investor expectations for the release of new U.S. inflation data soon. Notwithstanding this downturn, worries about disruptions to the oil supply persisted due to geopolitical tensions in the Middle East, specifically Israeli incursions into Gaza and worries about a possible confrontation with Hezbollah.
Strong predictions for global demand growth from OPEC, the IEA, and the US EIA all of which point to strong growth in oil demand for the second half of the year have lifted the market mood. Important OPEC+ nations like Iraq and Russia have also reiterated their adherence to production caps. To further maintain prices, Saudi Arabia has also indicated that it is willing to modify output in response to changes in the market.
Following the announcement by OPEC+ that they would be raising output starting in October in anticipation of increased demand, investor confidence increased. Data from the U.S. Energy Information Administration (EIA) showed that crude oil stocks fell by 2.547 million barrels for the week that ended on June 14, which was more than the 2 million barrel reduction that the market had anticipated.
Stockpiles of distillate dropped by 1.726 million barrels compared to an expected increase of 1 million barrels, and petrol stocks fell by 2.28 million barrels against an expected rise of 1.10 million barrels. On the other hand, after a loss of 1.593 million barrels the week before, oil supplies at the Cushing, Oklahoma, delivery hub increased by 0.307 million barrels.
