Monday's settlement of  USD 82.33 marked a 1% decrease in the price of crude oil, which had risen 2.1% the previous week. The dollar's strength on Monday proved detrimental to the price of oil. Additionally, once Hurricane Beryl made landfall in Texas on Monday and transformed into a tropical storm, worries that it might hinder oil production in the Gulf of Mexico decreased.

Big Data

The US job market is slowing down, and Monday's global economic news was worse than anticipated and negative for both the demand for energy and the price of crude oil. These economic statistics did not help the demand for crude oil. Compared to forecasts of -0.5, the Eurozone July Sentix investor confidence index dropped -7.6 to a 4-month low of -7.3.

German trade news is negative for both economic expansion and energy consumption as the country's May exports dropped 3.6% m/m, less than the -2.8 m/m forecast and marking the largest drop in five months. The US CPI, weekly unemployment claims, PPI, preliminary University of Michigan Consumer Sentiment, and predictions for both short- and long-term inflation would be the main sources of interest for the market.

Worldwide Provision

Only 86 international oil tankers identified China as their next destination in the following three months, five less than the previous week and the lowest weekly total, according to a Bloomberg poll on crude oil demand in China for the week ending June 28.                                                                                                                                                                                                       

China is the second-largest user of crude oil in the world, therefore a decline in that demand is bad news for oil prices. Oil prices are negatively impacted by Russia's higher-than-expected crude output and exports.

The most in two months, Russian gasoline exports increased by +620,000 bpd to 3.67 million bpd in the week ending June 30. The quantity of crude oil stored globally aboard tankers that have been stationary for at least a week increased by 11% week over week to 86.58 million barrels as of July 5, according to Vortexa's weekly statistics released on Monday.

Last Friday, Baker Hughes released a report stating that the number of operating US oil rigs in the week ending July 5 remained at 479, a 2-1/2 year low. Over the previous year, there have been less US oil rigs than the 627 rigs 4-year high recorded in December 2022. This week will see the release of the EIA and OPEC's monthly oil reports. According to an early assessment, OPEC's June crude output decreased by 80,000 barrels per day to 26.98 million barrels per day.

Prospects

Following her landfall on the Texas coast, Hurricane Beryl subsided into a tropical storm, allaying investor concerns about potential disruptions to the area that produces 40% of the nation's crude oil.

The actual result of the current cease-fire negotiations between Israel and Hamas, which are being mediated by Qatar, may result in a few dollars' worth of reduction in risk premiums. WTI increased by 2.1% last week as a result of data released by the Energy Information Administration indicating a decrease in crude and refined product stocks for the week ending June 28.

Although WTI has had an excellent run, having recovered 15% from the low in early June, technical charts suggest that the benchmark may encounter significant resistance around USD 86.50. We also anticipate further selling on the counter before the next phase of the recovery can begin.