Oil prices remained stable on Tuesday 25th July, hovering around three-month highs, influenced by market developments such as signs of tighter supply and promises from Chinese authorities to strengthen the world’s second-largest economy, alongside lackluster Western economic data.
Brent futures remained unchanged at $82.74 per barrel midway through the session, while U.S. crude oil, West Texas Intermediate (WTI), rose 1 cent, or 0.01 percentage point, to $78.75.
Crude prices have already recorded four consecutive weekly highs, driven by expectations of reduced supply due to production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies.
Brent contracts for early delivery are selling above future deliveries, a price structure known as “backwardation,” indicating that traders predict a tighter supply.
“On the supply side, although remote for now, risks are growing following the escalation of the war in Europe and the bombing of Ukrainian port infrastructure along the Danube River,” says the ING consultancy in a note cited by Reuters, which states that attacks on grain silos could affect energy markets. “The market is starting to get a little nervous about a potential supply disruption,” the document states.
