Middle East De-escalation Strips Risk Premium from Crude Oil News Today
Geopolitical risk premiums that had previously lifted crude above $80 were erased as Iran reaffirmed its nuclear commitments, and an Israel-Iran ceasefire ended a 12-day conflict.
Plans for renewed U.S.-Iran talks and meetings between Saudi and U.S. officials further reduced fears of immediate supply disruptions. With conflict risks sidelined, traders refocused on structural supply-demand factors in setting near-term positioning.
Demand Concerns Weigh on Oil Prices Forecast
Demand signals disappointed, reinforcing bearish sentiment last week. China’s factory activity contracted for a third consecutive month, while its services sector growth slowed to a nine-month low, reflecting weaker domestic demand and export challenges. Although Chinese refiners sought additional term barrels for August and September, the overall Asian demand outlook remained soft.
In the U.S., crude inventories rose unexpectedly by 3.8 million barrels to 419 million, defying forecasts for a draw during peak driving season. Gasoline demand fell to 8.6 million barrels per day, below seasonal norms, raising concerns about domestic energy consumption and refined product demand.
Trade Policy Uncertainty Pressures Oil Prices Projections
Trade concerns continued to pressure market sentiment as the July 9 tariff deadline approaches, with potential 20-30% U.S. tariffs threatening global economic growth and, by extension, oil demand.
A preliminary U.S.-Vietnam trade deal offered temporary optimism but did little to offset broader uncertainty weighing on risk appetite across energy markets.
