Crude oil fell to a three-month low
After starting the day on a weaker note, crude oil fell lower as the day progressed on July 25. It ended the day at the lowest level since April 25. At 3:45 PM EST on July 25, the West Texas Intermediate crude oil futures contract for September delivery was trading at $43.06 per barrel—a decline of ~2.6%. Brent crude was trading at $45.1 per barrel—a drop of ~2.2%.
Supply fears dragged prices down
Crude oil fell in the last week because of supply glut concerns. The sentiment became much weaker after the release of the oil rig count data by Baker Hughes at the end of the week. Crude oil carried the same weaker sentiment to this week. The strength of the dollar also weighed on prices. Higher crude oil inventory levels, especially for this time of year, raised concerns about the global supply glut situation. Even though the weekly inventories fell by 2.34 MMbbls (million barrels)—better than the market’s expectation of a drawdown of 2.1 MMbbls, according to the U.S. Energy Information Administration—crude oil inventories reached 519.5 MMbbls. It’s high for this time of the year.
Market awaits crude oil data
The market is looking forward to the weekly crude oil inventory data scheduled to release on July 26 and 27. Last week, Baker Hughes reported that the oil rig count moved up by 14 to 371 by recording an increase for the seventh time in the last eight weeks. This is the fourth consecutive rise in the oil rig count. It triggered concerns about the chances of an increase in domestic crude oil production amid the supply glut. On July 25, major crude oil producers Carrizo Oil & Gas (CRZO), Canadian Natural Resources (CNQ), British Petroleum (BP), and Total S.A. (TOT) fell 4.9%, 4.9%, 2.7%, and 2.38%. The SPDR S&P Oil & Gas Exploration and Production ETF (XOP) and the PowerShares DB Oil ETF (DBO) fell 2.6% and 1.9%.
In the next part, we’ll discuss how copper performed on July 25.