DTN Oil Update
Oil Futures Dip on Ample Supply, Weak Demand
HOUSTON (DTN) -- Oil futures continued to trend bearish on Tuesday morning driven by abundant supply expectations as OPEC+ countries agreed to release additional crude oil output in August and September, despite the United States recording its narrowest trade deficit in June since 2023.
The front-month NYMEX WTI futures contract dropped by $0.68 to $65.61 bbl, while the October ICE Brent futures contract decreased by $0.71 to $68.05 bbl. The September RBOB futures contract fell by $0.003 to $2.1019 gallon, while the ULSD futures contract for September delivery declined by $0.0497 to $2.2679 gallon.
The U.S. dollar rose by 0.174 points to 98.890 against a basket of foreign currencies.
During the weekend, eight OPEC+ countries agreed to increase output by 547,000 bpd for September, in addition to the 548,000 bpd rise for August and 411,000 bpd output increase set in July. These actions are anticipated to put pressure on oil future prices, despite secondary sanctions recently imposed by the European Union on Russian oil trade.
On July 18, the EU prohibited the import of seaborne crude oil and refined petroleum products from Russia and imposed it a price cap of $47.60 bbl. With this measure, the EU expect to impact around half of Russia's total oil exports to the bloc.
The Trump administration is also expected to imposed fresh sanctions on Russia next week if a peace deal with Ukraine is not reached in the coming days.
Separately, the Bureau of Labor Statistics this morning reported that the U.S. trade deficit fell by 16% to $60.2 billion in June compared to May, as imports declined by 0.5% to 337.5 billion, while exports fell by 3.7% to $277.3 billion in the same period. The figure was below market expectations, which had forecasted a deficit of $61.5 billion.
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