On the 2nd (local time), oil prices partially recovered losses after the US crude oil inventory significantly increased, boosting supply.
July Brent crude traded at the $84 per barrel line, the lowest since mid-March, while West Texas Intermediate crude rose above $80.
Commodity prices, including oil, became more attractive as the dollar value plummeted after the Federal Reserve Board downplayed the outlook for interest rate hikes.
Crude oil has faced various pressures in recent days. While primary term spreads indicate a weak market, the U.S. stockpile has increased the most since February last week. Prices also violated technical levels, further driving sales, and the options market was unfavorable.
In response, oil prices declined more than 5% this week after hitting a record high since October last year following Iran’s attack on Israel.
On the other hand, Helge Andre Martinsen, the senior oil analyst at DNB ASA, said, “We believe the oil market is well balanced and the geopolitical premium will completely break. Unless tensions in the Middle East escalate again, we believe there will be no reconsideration of $90 per barrel.”
According to a Bloomberg survey, Iraq and the United Arab Emirates (UAE) supply hundreds of thousands of barrels of oil daily, exceeding the agreed limit.
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