Mumbai, 27 Jul (Commoditiescontrol): Brent and U.S. crude futures dropped more than $2 per barrel on Friday due to declining demand from China and the potential reduction in geopolitical risk from a possible Gaza ceasefire agreement. The oil market experienced its third consecutive weekly decline.
West Texas Intermediate (WTI) crude oil futures fell by 1.4%, settling at $77.16 per barrel, driven by weak Chinese demand despite positive U.S. inventory data. Market sentiment was dampened by concerns over China's economic growth, underscored by Beijing's recent rate cuts aimed at stimulating the economy. Reduced oil imports and lower refinery activity in China further pressured prices.
Adding to the downward trend, ongoing ceasefire talks between Israel and Hamas alleviated supply concerns. On a positive note, strong U.S. economic growth in the second quarter raised expectations for potential Federal Reserve rate cuts in September, which could boost oil demand.
The Energy Information Administration (EIA) reported on Wednesday a larger-than-expected decrease in U.S. crude inventories by 3.7 million barrels and a significant drop in gasoline stocks by 5.6 million barrels. Looking ahead, market analysts are divided on whether OPEC+ will ease output curbs next quarter, with a crucial meeting scheduled for August 1.
In related news, money managers reduced their net long U.S. crude futures and options positions in the week leading up to July 23, according to the U.S. Commodity Futures Trading Commission (CFTC). The speculator group cut its combined futures and options positions in New York and London by 31,220 contracts, bringing the total to 207,538 during the period.
(By Commoditiescontrol Bureau: 09820130172)
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