The oil price presents additional negative trading to approach the $81.00 barrier, reinforcing expectations for the continuation of the downward trend for the rest of the day, and the way is open to achieving our next target at $80.08, noting that breaking this level will extend the downward corrective wave to reach $78.66 as the next negative station.
Technical support reinforces the downward trend: The 50 moving average supports the expected downward trend, provided that the price remains below the $81.84 and $82.40 levels. The expected trading range for today is between the support at $80.00 and the resistance at $82.80, with the price expected to continue falling.
Oil futures prices stabilized at the beginning of today’s trading after two days of decline, with attention turning to US monetary policy expectations and the price of the dollar. He stated that Brent crude, the global oil standard, was trading at less than $85 per barrel after declining by 0.6% during the past two trading sessions, while West Texas Intermediate crude, the US oil standard, was trading at about $82 per barrel. The decline came after Chinese data indicated that China’s GDP growth in the second quarter of 2024 reached 4.7%, while expectations indicated 5.1%.
Federal Reserve Chairman Jerome Powell said on Monday evening that the three US inflation readings during the second quarter of this year “somewhat increase confidence” that the pace of price increases is returning to the central bank’s target in a sustainable manner. Market participants interpreted these statements as an indication that lowering interest rates may not be far away. Lower interest rates reduce the cost of borrowing, Which could boost economic activity and demand for oil. Some analysts warned against being overly optimistic.
Oil demand growth forecasts remain unchanged
OPEC keeps oil demand growth expectations unchanged: Flexible economic growth and air travel will support the use of fuel in the summer. Oil supplies to OPEC countries decreased by 126 thousand barrels per day in the first quarter of this year, and governments and countries of the world are always anticipating changes related to the black gold “oil.” “, whether related to its production quantities or its global prices, due to the economic consequences that result from that.
The Organization of the Petroleum Exporting Countries (OPEC) maintained its expectations for relative growth in global oil demand during the years 2024 and 2025, and said that resilient economic growth and strong air travel will support fuel use in the summer months. While the International Energy Agency seems less optimistic, as it revised its estimates downward.
OPEC said in a recent report that global demand for oil will rise by 2.25 million barrels per day in 2024 and 1.85 million barrels in 2025, unchanged from its expectations last month.
OPEC also raised its forecast for global economic growth this year to 2.9% from 2.8%, and said that there is a possibility of increasing this percentage, pointing to the momentum that occurred this year outside the developed countries of the Organization for Economic Cooperation and Development.
OPEC said, “The momentum of economic growth in major economies remained resilient in the first half. This trend supports the overall positive growth path in the near term.”
Enhancing global demand: The report issued by the organization added: It is expected that the strong movement of transportation and air travel expected in the Northern Hemisphere during the summer holiday season will enhance the demand for transportation fuels and drive growth in the United States. Expectations for the strength of demand growth in 2024 are more disparate
Production levels and the 22 members of OPEC Plus
The OPEC+ alliance, which brings together members of the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, and 10 allied countries, most notably Russia, has been implementing a series of production cuts since late 2022 to support the market.
The coalition agreed last June to extend its recent cuts of 2.2 million barrels per day until the end of September and to gradually cancel them starting next October. The OPEC Plus alliance agreed last June to continue the voluntary oil alliance cuts of about 1.66 million barrels per day that were announced in April 2023, in place until the end of 2025.
The 22 members of OPEC Plus agreed to extend the current cuts in their oil production until the end of 2025, and they were scheduled to end at the end of 2024, in order to support prices in the face of many factors of instability. A statement said that the OPEC Plus alliance “will extend the level of crude oil production from January 1, 2025 until December 31, 2025.”
The total voluntary and mandatory production reduction amounts to about 5 million barrels per day, according to the organization’s data. A statement from the coalition showed that all OPEC countries set the same required production level in 2025 as in 2024, with the exception of the UAE, whose production rose to 3.519 million barrels per day, an increase of 300 thousand barrels. Daily. The statement stated that the UAE increase will take place gradually in stages, starting from January 2025 until the end of September 2025, adding that the required production level precedes the implementation of any additional adjustments to production.
China’s economy grew much slower than expected in the second quarter, hurt by a prolonged real estate downturn and job insecurity.
French oil giant
In a separate context, French oil giant Total Energies said on Tuesday that hydrocarbon production levels in the second quarter will reach the upper end of its forecast range, while higher refinery utilization rates will partially ease pressures on refining margins.
Total Energies is scheduled to announce its quarterly earnings on July 25, and investors are closely watching the company and its peers as refining margins decline due to weak demand for gasoline. Earlier this month, London-listed BP issued a profit warning. While Total expects fossil fuel production to reach the upper end of the previously announced range, at approximately 2.45 thousand barrels of oil equivalent per day.
Its integrated energy business is expected to post earnings of about $500 million, with quarterly cash flows expected to be in line with expectations of between $2.5 billion and $3 billion. LNG results appear broadly in line with the first quarter. Total Energies shares fell by about 0.8 percent in early trading, Tuesday, in line with the broader market. “The (Total Energies) trading update appears to be generally consistent, and would lead to limited changes in collective profits,” analysts said in a research note.
