INA-SOURCES
Oil prices posted modest gains on Tuesday as investors shifted their focus from easing tensions in the Middle East to rising global supply and future demand prospects, Reuters reported.
According to the report, Brent crude futures rose 28 cents, or 0.39%, to $72.29 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 29 cents, or 0.26%, to $68.84 per barrel. Both benchmarks had fallen back to near pre-Iran conflict levels on Monday.
Tim Waterer, chief market analyst at KCM Trade, told Reuters that growing oil supplies have reduced the immediate geopolitical risk premium in the market. However, he noted that traders remain cautious about the durability of the current ceasefire atmosphere, given the often volatile nature of U.S.-Iran relations.
The report said investors are closely monitoring negotiations between Washington and Tehran, particularly regarding shipping through the Strait of Hormuz, a critical route for global oil exports. Markets are also watching the recovery of oil shipments from Gulf producers.
Reuters reported that the United Arab Emirates increased crude oil production to more than 3.8 million barrels per day in June, its highest level since April 2020 and above levels seen before the recent Iran conflict. The increase followed the country's departure from OPEC+ production quotas in May.
Meanwhile, the Organization of the Petroleum Exporting Countries and its allies (OPEC+), including Russia, agreed on Sunday to raise collective production targets by an additional 188,000 barrels per day beginning in August, following similar increases implemented in June and July.
The report also noted that Saudi Arabia reduced the August official selling price of its flagship Arab Light crude for Asian buyers to $1.50 per barrel below the Oman/Dubai benchmark, marking the largest monthly reduction in more than two decades.
Analysts told Reuters that while markets have largely priced in expectations of higher oil supplies, future price movements will increasingly depend on demand trends, particularly in China, the world's largest crude importer.
Oil markets have remained volatile in recent months amid geopolitical tensions in the Middle East, changing OPEC+ production policies and uncertainty over global economic growth. Traders are now closely watching whether stronger supply levels will be matched by sufficient demand to support prices in the months ahead.
SOURCE: The Kabul Tribune