BTN News: In July, the oil market faced many challenges. Prices dropped because of uncertainty in the U.S. elections and slow economic growth in China. After months of rising prices due to global tensions, oil is now decreasing in price. This happened as U.S. crude stocks fell for the fourth week in a row. As a result, Brent crude had its second worst month this year.
Oil Prices Drop Over 6% in July, Lowest Point This Month
With only a few days left in July, oil prices fell more than 6%. They are now around $81 per barrel. This is the lowest price this month, although in June, prices dropped to $77.5 per barrel. At the start of July, Brent crude was $87 per barrel. Prices have been falling since then. Even with these recent drops, Brent crude has gone up about 6.7% in 2024. The highest price was in April at over $91 per barrel.
Concerns About Weak Demand in China Contribute to Oil Price Decline
Bloomberg reports that oil prices are weak because people worry about low demand in China. China is the biggest oil buyer in the world. But, oil futures are still higher this year. This is because OPEC+ is cutting production. Russian oil export data shows that their exports are at the lowest level since December.
OPEC+ Meeting on August 1 Might Lead to Production Increase
OPEC+ will meet again on August 1. People think they might decide to increase production. At their last meeting in June, OPEC+ and big producers like Russia agreed to raise production in October. But, they quickly changed their minds when prices fell sharply.
Energy Companies Hit by Falling Oil Prices in July
Energy companies are feeling the impact of falling oil prices this month. In the Stoxx 600, a big European stock index, Repsol is the worst-hit oil company in July. Its shares are down over 10%. Despite this, Repsol announced a 14% rise in quarterly profits. They also announced a new share buyback plan to reward shareholders.
Other Oil Companies Also See Stock Price Declines
Poland’s Orlen is next, with its stock down nearly 5.5% this month. UK-based BP’s share price has dropped by about 4.4%. On the other hand, Portugal’s Galp Energia has done better and is the least affected oil company in July.
European Crude Oil Only Had Negative Month in May This Year
This year, European crude oil only had one month with negative numbers, which was in May. Prices fell by more than 7%. In the U.S., the West Texas Intermediate (WTI) also fell by 6% in July. It had price drops in both April and May.
Global Oil Market Faces Challenges as Investors Watch OPEC+ Developments
The global oil market is facing many challenges. Industry stakeholders and investors are watching what OPEC+ will do next. They are waiting to see how production and prices will be affected.
