Futures on US West Texas Intermediate Crude Oil eased on Tuesday due to possible profit-taking, following a strong performance in July mostly driven by supply tightening.
WTI Crude Futures settled at $81.80 per barrel on Monday, the commodity’s highest since April 14th. Futures gained as much as 15.8% last month, or the most since January 2022.
“Oil prices may face a correction risk as the markets may have been overbought in the past month,” Tina Teng, analyst at CMC Markets, was quoted as saying by Reuters.
Expectations that major central banks such as the Federal Reserve and the European Central Bank are getting closer to exit their rate-hiking campaigns reinforced global growth and fuel demand prospects.
According to the latest US data, fuel demand rose to 20.78 million barrels per day in May, or a level not seen since August 2019.
Prospects of Chinese stimulus measures to prop up post-COVID recovery have also supported oil prices. Yesterday the Chinese authorities released additional policy guidelines, but still, no concrete measures, to spur momentum.
Weaker-than-expected China manufacturing PMI data for July, released on Tuesday, reinforced the case for economic stimulus.
On the supply side, Saudi Arabia is expected to roll its voluntary output cuts through September at the OPEC+ meeting this Friday.
As of 12:05 GMT on Tuesday WTI Crude Oil Futures for September delivery were edging down 0.27% to trade at $81.58 per barrel.
At the same time, Brent Oil Futures for October delivery were edging down 0.20% on the day to trade at $85.26 per barrel.
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