Oil prices steady near 3-month highs

Oil prices steady near 3-month highs

Oil prices remained steady on Tuesday, staying close to three-month highs. This was due to indications of tighter supplies and assurances from Chinese authorities to support their economy, which is the second-largest in the world. However, weaker economic data from Western countries had a dampening effect on sentiment.

At 0823 GMT, Brent futures were down 4 cents, or 0.05%, at $82.70 a barrel, while U.S. West Texas Intermediate (WTI) crude remained stable at $78.74.

Both crude benchmarks are on track for their fifth consecutive weekly gain, as output cuts from the Organization of the Petroleum Exporting Countries (OPEC) and its allies are expected to lead to tighter supplies.

The price structure of earlier-loading Brent contracts selling above later loadings, known as backwardation, indicates that traders anticipate tight supply. In fact, the six-month spread is near a two-and-a-half month high.

Industry data on U.S. crude inventories is expected to be released around 2030 GMT. Analysts polled by RushHourDaily estimated that crude inventories fell by approximately 2 million barrels in the week ending July 21.

In China, leaders have pledged to increase economic policy support. This is significant as China is not only the second-largest economy but also the second-largest oil consumer in the world.

On the other hand, business activity in the euro zone contracted more than anticipated in July, according to a survey. Similarly, business activity in the U.S. slowed to a five-month low in July, as reported by a closely watched survey. However, falling input prices and slower hiring suggest that the Federal Reserve may be making progress in its efforts to reduce inflation.

There was also a bearish signal from the U.S., as a unit at a major refinery in Baton Rouge will be shut for up to four weeks, reducing its capacity by 110,000 barrels per day.

Investors have already factored in quarter-point interest rate hikes from both the Federal Reserve and the European Central Bank this week. Therefore, the focus will be on the statements of Fed Chair Jerome Powell and ECB President Christine Lagarde regarding future rate increases.

In conclusion, oil prices remained steady near three-month highs due to signs of tighter supplies and support from Chinese authorities. However, weaker economic data from Western countries had a negative impact. The market is also anticipating the release of U.S. crude inventory data and closely watching the statements of central bank officials.

About News Team

Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

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