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Monday, July 4, 2022

Oil prices post modest rebound

World oil (Other OTC: WOGI – news) prices staged a modest rebound Tuesday on the eve of the latest official snapshot of US commercial crude inventories and production.

US benchmark West Texas Intermediate for delivery in August rose 21 cents to finish at $ 50.36 a barrel on the New York Mercantile Exchange, snapping four straight sessions of losses. The contract expired on Tuesday.

In London trade, Brent North Sea crude for September delivery closed at $ 57.04 a barrel, a gain of 39 cents from Monday’s settlement.

“The market was probably a little oversold,” said Phil Flynn of Price Futures Group. “Weakness in the dollar gave us a little bit of support as well.”

The dollar fell slightly, making dollar-denominated crude oil less expensive.

But looking ahead, there was little reason to anticipate the market would head higher, said Tim Evans, an analyst at Citi Futures.

“We don’t see a fundamental case for a sustained price rally given an ongoing global supply/demand surplus, with (a) key OPEC member still seemingly more intent on defending market share than in reining in excess supply to support the price,” Evans said in a client note, referring to Saudi Arabia.

Traders awaited the US Department of Energy’s weekly petroleum report Wednesday for signs about the strength of demand in the US, the world’s largest consumer of crude oil.

US crude inventories were expected to have dropped by two million barrels in the week ended July 17, according to analysts polled by Bloomberg News. Stockpiles fell by 4.3 million barrels in the previous week to 461.4 million barrels.

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