Energy
Tuesday, July 30th, 2024 1:53 pm EDT
Key Points
- U.S. Crude Oil Prices Hit New Lows: On Tuesday, U.S. crude oil futures fell to their lowest levels since early June, with West Texas Intermediate (WTI) dropping to $75.19 per barrel and Brent crude at $79.03 per barrel. The decline is attributed to economic concerns rather than geopolitical tensions.
- Chinese Economic Concerns Dominate Market Sentiment: The drop in oil prices is largely driven by worries over China’s economy, including sluggish growth and decreasing crude oil imports, which have overshadowed recent escalations in the Middle East.
- Middle East Tensions Persist: Despite the economic concerns, geopolitical issues continue to be a factor, with Israel expected to retaliate against Hezbollah after a rocket attack from Lebanon resulted in civilian casualties.
On Tuesday, U.S. crude oil futures fell to their lowest levels since early June, driven largely by concerns over China’s economic performance, which overshadowed recent escalations in the Middle East. According to Tamas Varga, an analyst with the oil brokerage PVM, macroeconomic factors have significantly influenced investor sentiment, leading to a sharp decline in oil prices as they breached key technical support levels. The turmoil in China’s economy, marked by sluggish growth and declining crude oil imports, remains a primary factor impacting the market.
As of Tuesday, West Texas Intermediate (WTI) crude oil for the September contract was trading at $75.19 per barrel, a decrease of 62 cents or 0.82%. Year-to-date, WTI crude has experienced a gain of 4.9%. Similarly, Brent crude oil for September delivery was priced at $79.03 per barrel, down 75 cents or 0.9%, with a year-to-date gain of 2.6%. Other energy commodities also saw declines: RBOB gasoline for August was down 2 cents or 0.86%, trading at $2.39 per gallon, though it has gained 13.8% year-to-date. Natural gas for September delivery fell by 4 cents or 1.8%, settling at $2.00 per thousand cubic feet, reflecting a 20.4% decrease year-to-date.
In the Middle East, tensions are high following a recent attack from Hezbollah, an Iran-backed militia, which resulted in the death of 12 children in the Israeli-occupied Golan Heights. Israel is anticipated to respond to this aggression, but officials have indicated a desire to target Hezbollah without escalating into a full-scale war. Despite these geopolitical tensions, the dominant factor in oil price movements appears to be economic uncertainties, particularly those stemming from China’s slowing economic activity and its impact on global oil demand.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/07/30/us-crude-oil-falls-below-76-per-barrel-lowest-level-since-early-june.html
