The price of oil fell by about 0.45% after rising by about 3% in the previous two sessions amid escalating geopolitical tensions in the Middle East.
The price correction was caused by partial profit-taking and continuing concerns about demand. Meanwhile, the negative dynamics of the US dollar limited the fall in prices.
Potential disruptions to oil supplies in the Middle East have caused volatility, and the killing of senior members of the militant groups Hamas and Hezbollah has increased the likelihood of Iranian retaliatory strikes against Israel. However, oil supplies have not yet been affected.
Yesterday's data from the Energy Information Administration also remains in focus. Data showed that crude inventories declined by 3.728 million barrels in the week ended August 2, following a fall of 3.436 million barrels in the previous week. Overall, this marked the sixth straight weekly decrease in the U.S. crude inventories. Economists had forecast a slip of 0.400 million barrels. At the same time, gasoline stocks increased by 1.340 million barrels, recording the first gain in three weeks. Analysts had forecast a draw of 1.800 million barrels. Elsewhere, distillate stocks rose by 0.949 million barrels. Analysts had expected a build of 0.200 million barrels. Meanwhile, oil production in the U.S. advanced by 100,000 barrels a day to 13.400 million barrels per day, the highest level on record. U.S. crude oil imports averaged 6.2 million barrels per day last week, logging a fall of 729,000 barrels per day from the week before. Overall, the latest data indicated that demand for physical oil remains high, despite concerns about weak economic activity.
Meanwhile, analysts warned that Brent crude oil prices could return to the range of $80-85 per barrel amid still-tight balances through August, heightened geopolitical risks and the possibility of weather-related disruptions through hurricane season.