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Oil futures fell to a six-week low on Tuesday amid a broad-based decline in commodity prices, led by renewed concerns about demand in China given the lack of further government support for the economy.
“Oil Bears Are Apparently Getting Into the Market Early” “ahead of the seasonal drop in oil prices,” said Han Tan, chief market analyst at Exinity Market watchnoting that oil prices average monthly declines from August to November for the last five years.
In the Middle East, efforts to reach a ceasefire agreement between Israel and Hamas in the Gaza Strip appear to be bearing fruit. gained momentumand Israeli Prime Minister Netanyahu told the families of the hostages that an agreement to release them was close to being reached.
Canada’s oil production remained generally stable, but the risk of forest fires is increasingGoldman Sachs analysts say.
Nymex (CL1:COM) Crude Oil Monthly Delivery Closed for September -1.8% to USD 76.96/bbl, and the September Brent (CO1:COM) crude oil price ended -1.7% to $81.01/bbl, the lowest settlement price for both indices since June 7.
US diesel futures (HO1:COM) closed at their lowest since June 7, while US gasoline futures (XB1:COM) closed at their lowest since June 14.
Natural gas futures (NG1:COM) fell for the first time in four sessions, giving up half of the previous day’s robust gains and ending the day lower. -2.8% at $2.187/MMBtu.
ETFs: (NYSEARCA: USE), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI), (UNG), (COOKING), (COLD), (UNL), (FCG), (UGA)
Oil markets are tight for now, but that’s likely to continue go into surplus next yearMorgan Stanley analysts say Brent crude prices will fall to $70-$75.
Difficult conditions will persist through most of the third quarter, but balance will return in the fourth quarter “as seasonal favorable demand conditions weaken and both OPEC and non-OPEC supply returns to growth,” the bank wrote.
Morgan Stanley said OPEC and non-OPEC supply should rise by about 2.5 million barrels a day in 2025, far outpacing demand growth. It added that refinery production would likely peak in August this year and would not likely return to that level before July 2025.
