Oil Prices Continue Falling Following Beryl & Powell’s Testimony

Oil prices fell again on Tuesday as Hurricane Beryl had less of an impact on US oil output and other related facilities than feared. There was some volatility around Fed Chair Powell’s comments as he remained vague on timing of easing. He continued to say that more good inflation data is needed to cut but the softening labour market means that further hikes are unlikely. The USD index rose 0.1%.

• WTI fell 0.6% to $81.81/bbl but is still up 0.3% in July. It is currently trading lower at $81.62. The benchmark fell to an intraday low of $81.25 following Powell’s testimony. The bull cycle remains intact though and this week’s move lower appears corrective. Initial resistance is at $84.52, July 5 high, while support is at $79.63, 50-day EMA.
• Brent is down 0.8% to $85.04 but it fell below $85 earlier to a low of $84.53. It is now little changed on the month. The intraday high was at $85.85. This move is currently seen as corrective as last week’s gains maintained the bullish sequence of higher highs and higher lows. Initial resistance is at $87.95 and the bull trigger at $89.32 with support at $83.68.
• The EIA short-term outlook included a moderate downward revision to this year’s global oil demand to 102.9mbd.
• OPEC+ improved its quota compliance in June with a Platt survey reporting that it reduced output by 130kbd to 40.87mbd.
• Bloomberg reported that US crude inventories fell 1.92mn last week, according to people familiar with the API data. This was the week that included the July 4 holiday and there was a gasoline drawdown of 2.95mn but a distillate build of 2.34mn barrels. The official EIA data is out later today.