Oil futures finished lower on Monday, easing back after recording their largest weekly gain in three months on Friday, as traders awaited monthly reports on U.S. and global crude supply and demand due out later this week.
Price action
-
West Texas Intermediate crude for August delivery
CL00,
+2.44% CLQ24,
+1.91%
shed 87 cents, or 1.2%, to settle at $72.99 a barrel on the New York Mercantile Exchange. That was the biggest daily percentage decline for the front-month contract since July 3, according to Dow Jones Market Data. -
September Brent crude
BRN00,
-0.10% BRNU23,
-0.10%
the global benchmark, shed 78 cents, or 1%, to settle at $77.69 per ounce on ICE Futures Europe, marking the biggest one-day dollar and percentage decline since June 27. -
August gasoline
RBQ23,
+1.90%
settled at $2.5696 a gallon, down 0.8%, while August heating oil
HOQ23,
+0.87%
fell 0.2% at $2.5532 a gallon. -
August natural gas
NGQ23,
+2.32%
rose 3.4% to $2.669 per million British thermal units.
Market drivers
Oil prices fell on Monday, after scoring a second weekly gain in a row on Friday and their best best weekly rise since April.
“Having come off the back of two weeks of gains, the same old concerns over weaker demand are serving to help cap gains,” said Michael Hewson, chief market analyst at CMC Markets UK, in market commentary on Monday.
Oil supply cuts by the Organization of the Petroleum Exporting Countries continue to support prices, said Naeem Aslam, chief investment officer at Zaye Capital Markets. Those including Saudi Arabia’s decision to extend its production cut through August.
At the same time, “traders are keeping a close eye on the Chinese economic data and praying that demand will revive to a level that will give a boost to oil prices,” Aslam said in a market update.
On Monday, official data from China showed that the nation’s factory-gate price index tumbled further into deflation in June and its consumer prices were flat on year.
“So far, it is very clear that there are more sellers in the [oil] market who find every opportunity to sell oil whenever they see that weaker fundamentals are emerging, and to counterbalance that, OPEC is left with no other choice but to cut oil supply more,” Aslam said.
Oil prices this week are “more likely to consolidate, while investors hope to see a lower reading on the U.S. CPI data, which would help Americans turbocharge economic activity,” he said. See the U.S. economic calendar.
Among the oil-related reports this week, the Energy Information Administration will release its monthly Short-term Energy Outlook on Tuesday, while separate monthly oil reports from the International Energy Agency and OPEC are set for release on Thursday.
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