Oil saw mixed trading Tuesday, with U.S. prices moving lower and global crude prices trying for a rebound after sharp losses a day earlier, as traders remained concerned about a potential rise in output and an uncertain economic and political backdrop.
August West Texas Intermediate crude CLQ8, -0.91% shed 59 cents, or 0.9%, to $67.47 a barrel on the New York Mercantile Exchange, while September Brent oil LCOU8, +0.08% —the international benchmark—added 20 cents, or 0.3%, to $72.04 a barrel on ICE Futures Europe.
Both contracts settled with sharp losses on Monday, ending more than 4% lower. The selloff in oil futures came after reports that President Donald Trump’s administration was considering releasing oil from the U.S. Strategic Petroleum Reserve and reports Saudi Arabia has offered to increase output for Asian customers.
Month to date, both benchmark trade roughly 9% lower. The slump in prices was “triggered by a surprise announcement last Wednesday that two major Libyan ports would reopen immediately,” said analysts at Capital Economics.
“Since then, the market has been bombarded with a series of bearish headlines,” including news of possible U.S. waivers on Iran oil sanctions and concerns about oil demand in the wake of weak Chinese economic data and an escalation in U.S.-China trade tensions, they said.
Also, “worries about a scarcity of supply have receded as Saudi Arabia and Russia both declared that they would increase oil supply, and U.S. President Trump threatened to tap into the U.S. oil reserves,” the analyst said. “Even though oil prices have already fallen substantially, we think that they will fall even further.”
Meanwhile, the market will get an update on U.S. petroleum supplies late Tuesday from the American Petroleum Institute. The much-anticipated figures from the Energy Information Administration will be released Wednesday.
On average, analysts surveyed by S&P Global Platts expect the EIA to report a decline of 3 million barrels in crude stockpiles for the week ended July 13. They also forecast supply declines of 1 million barrels for gasoline and 45,000 barrels for distillates.
August natural gas NGQ18, -0.80% shed 0.6% to $2.743 per million British thermal units.