London, Aug. 7, 2024 – Oil was steady after recovering from a global market rout as investors watched for a retaliatory strike from Iran on Israel.
Brent traded above $76 a barrel after closing slightly higher on Tuesday as equities led a rebound in risk assets. West Texas Intermediate was near $73.
Traders continue to monitor the Middle East and a potential attack by Iran on Israel as payback for assassinations of Hezbollah and Hamas leaders.
Oil still faces headwinds from faltering demand in China and the US, and the potential addition of supply from OPEC+ from next quarter.
An escalation of hostilities in the Middle East would spark further price gains, but an impact to crude output from the region is needed for a sustained increase.
“Sentiment in financial markets has steadied and crude has stopped sliding, but it feels like a tentative bottom,” said Vandana Hari, founder of Vanda Insights in Singapore.
“Oil market participants are keeping a close eye on rising tensions in the Mideast, but not pricing in any supply risk premium
China’s oil imports dropped to the slowest pace in almost two years last month, underscoring concerns about weaker demand.
In the US, industry figures pointed to a marginal gain in crude inventories after five weeks of declines and a large build of gasoline stockpiles. US government data is due Wednesday.
There are also concerns about the demand outlook for next year.
The Energy Information Administration trimmed its crude consumption estimate to 104.5 million barrels a day in 2025 on a slowdown in China, according to a monthly report from the US agency on Tuesday. (Bloomberg)
