Saturday, 3 May 2025

Oil decline due to a possible increase in Iraqi supplies and ‎demand concerns

Oil prices fell today, Tuesday, as the market waited to see whether Iraqi exports through the Turkish port of Ceyhan would resume, which could alleviate the supply scarcity resulting from the OPEC + alliance cuts, while the faltering Chinese economy still casts a shadow on global demand expectations. ,

According to Reuters, Brent crude fell eight cents to $84.38 a barrel, and US West Texas Intermediate crude fell seven cents to $80.65 a barrel.

The entry of more Iraqi crude oil into the market may help alleviate the supply crisis of high-sulfur crude caused by the prolongation of the OPEC + alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and its allies, the duration of production cuts and their increase in size.

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Pessimism about the economic prospects in China, the second largest oil consumer in the world, also put pressure on prices and increased concerns about fuel demand.

“Chinese economic weakness weighs heavily on oil prices and will put a ceiling on them this year, especially since Beijing seems committed to avoiding large-scale fiscal stimulus,” Eurasia Group said in a note.

A preliminary Reuters poll showed that crude oil and gasoline inventories in America are expected to have declined last week, which curbed the decline in oil prices.

The American Petroleum Institute will release inventory data later in the day. In turn, the Energy Information Administration, the statistical arm of the US Department of Energy, will release its data tomorrow, Wednesday

A note from ANZ Research said the market was also focused on preliminary US PMI data for August and the US central bank’s annual Jackson Hole economic symposium scheduled for later in the week.

US economic data over the past few weeks supported expectations that the central bank will keep interest rates high for a longer period, which weakens the prospects for demand for oil and a wide range of consumer goods.

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