Oil Futures Pull Back After Strong July Performance

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The oil futures market saw a slight decline on Tuesday following a strong showing in July. The U.S. benchmark, West Texas Intermediate (WTI) crude, closed the previous session at its highest level in over three months.

Price Action

  • WTI crude for September delivery fell 47 cents, or 0.6%, to $81.33 a barrel on the New York Mercantile Exchange.
  • The global benchmark, Brent crude, declined 42 cents, or 0.5%, to $85.01 a barrel on ICE Futures Europe.

Market Drivers

Both WTI and Brent reached their highest levels since April 14 on Tuesday, thanks to strong gains in July. These gains were driven by supply cuts implemented by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia. Saudi Arabia’s voluntary reduction of 1 million barrels a day for July and August, which is expected to continue into September, also played a role in boosting prices.

Ricardo Evangelista, senior analyst at ActivTrades, highlighted the impact of increasing demand from the world’s two largest consumers of crude and the leading global exporter cutting production. This combination has led traders to anticipate tighter supply conditions and growing demand, thereby supporting oil prices.

In summary, despite a slight pullback, oil prices have remained strong following an impressive performance in July. Supply cuts and positive market indicators continue to contribute to the overall bullish sentiment.

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