Oil Prices Tumble as Supply Outpaces Demand

23 Jul 2024 , 10:04 AM

Tuesday saw a decline in oil prices for a third trading day as investors turned their attention to the possibility of growing oil supplies and poor demand, paying little attention to the turmoil surrounding the US presidential campaign.

September Brent crude futures were down 9 cents to $82.31 per barrel. September’s price of U.S. West Texas Intermediate crude dropped 10 cents to $78.30 a barrel.

The news on Sunday that U.S. President Joe Biden will withdraw his candidacy for reelection and support Vice President Kamala Harris was mostly disregarded by traders. According to Citi analysts, neither Donald Trump, the Republican contender, nor Senator Harris would support measures that would significantly impact the oil and gas industry.

The market instead concentrated on the supply and demand for oil, which Morgan Stanley analysts predicted will level out by the end of the fourth quarter and increase to a surplus by the following year, bringing Brent prices down to the mid-to-high $70s per barrel.

The official U.S. government data is expected to land on Wednesday, while the trade association American Petroleum Institute is set to reveal its estimates for last week’s oil inventories on Tuesday.

According to an initial Reuters survey of six analysts, U.S. crude inventories decreased by 2.5 million barrels on average in the week leading up to July 19, while gasoline inventories most likely decreased by 500,000 barrels.

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