Strong foreign demand assisted in allaying concerns about a recession, as seen by a better-than-anticipated China trade surplus for the past month. Compared to June, China purchased more oil. However, it was still less than it did during the same time in 2021.
After multiple stages of delayed negotiations over the last 18 months, a draft document to reinstate the 2015 US-Iran nuclear agreement was completed early in the week. Sanctions against Iran, particularly those pertaining to oil exports, might be lifted if Washington and Tehran accept the conditions outlined in the draft.
Even though no precise timetable is available, Iran would probably be able to manufacture more than 1 million barrels daily. Generally, due to the increased supply, an agreement would probably cause pressure on oil prices.
Oil traders are currently anticipating inventory updates from the Energy Information Administration (EIA) and the American Petroleum Institute (API). For the week prior, analysts anticipate the EIA will announce a 400k barrel drop in crude oil inventories. The monthly Oil Market Report will be released by the Organization of the Petroleum Exporting Countries (OPEC+) by week’s end.
If the main result exceeds the consensus estimate of 8.7% year-over-year (YoY) for the US consumer price index (CPI), which is scheduled to be released on August 10, Fed rate rise bets may increase. That would probably affect the price of commodities, oil specifically.
Having declined for four weeks in a row, the WTI prompt spread, which constitutes the difference among the contract prices for this month and the following, is about to reach its lowest point since April. The commodity is receiving a bearish indication despite the fact that it is in backwardation. All things considered, price movement is more prone to be affected by stock levels, wider macroeconomic indicators, the OPEC+ report, and bearish indications.