Oil prices fluctuate amid global economic indicators, geopolitical developments

(MENAFN) Oil prices experienced volatility on Wednesday, initially gaining ground but subsequently retracting after inflation data from China, the world's largest crude importer, fell below expectations. brent crude futures dipped by 27 cents to USD84.39 per barrel, marking a 0.3 percent decline from the previous session's 1.3 percent drop. Similarly, U.S. West Texas Intermediate crude edged down 20 cents to USD81.21 per barrel, following a 1.1 percent decrease in the prior session.

The recent price movements followed a three-day decline as reports indicated that the Texas energy sector had largely withstood Hurricane Beryl, which struck the region earlier in the week. Operations resumed swiftly with reopened ports and increased production, although some facilities sustained damage and full power restoration remains ongoing.

In China, consumer prices rose for the fifth consecutive month in June but failed to meet market expectations, while producer prices continued their deflationary trend. These economic indicators tempered market sentiment, influencing oil price adjustments alongside ongoing geopolitical developments.

Negotiations for a ceasefire in the Gaza conflict are set to resume in Doha, with the participation of intelligence chiefs from Egypt, the United States, and Israel. This diplomatic effort adds to market uncertainties, impacting oil price dynamics amidst geopolitical tensions in the Middle East.

Meanwhile, in the United States, recent data from the American Petroleum Institute (API) showed declines in crude and gasoline inventories for the past week, indicating stable summer fuel demand. Crude inventories decreased by 1.923 million barrels, while gasoline stocks fell by 2.954 million barrels. However, distillate inventories saw an increase of 2.342 million barrels.

Supporting expectations of potential oil price increases, a report from the U.S. Energy Information Administration (EIA) suggested that global oil demand is poised to outpace supply next year, reversing previous projections of a surplus. This outlook, alongside ongoing market developments, continues to shape the trajectory of oil prices amid complex economic and geopolitical factors influencing global energy markets. 

MENAFN10072024000045015682ID1108426529