Brent crude dropped $1.03 to $88 a barrel while WTI slid $1.50 to $82.09 as rising tanker traffic eased fears of an immediate supply crunch. Yet, both are still set for gains near 20% this month, backed by ongoing tensions in the Middle East.
More oil is flowing through critical routes like the Strait of Hormuz, which handles around 20% of global crude and LNG shipments. This uptick in shipping helped cool prices, even as insurance and freight costs remain elevated, reflecting persistent risks. Attention also stays on the Red Sea and Bab el-Mandeb Strait amid new threats to Saudi shipping lanes.
U.S. crude stockpiles fell by 7.2 million barrels to 404.5 million, a bigger drop than expected that underlines tightness in the American market despite improved international flows. This mix of higher supply and shrinking inventories creates a market tug-of-war. Meanwhile, OPEC+ plans a modest production increase of 188,000 barrels daily in August, as members review compliance and past overproduction.
The technical outlook for Brent points to $80.67 as key support. Holding above this level could see a rebound toward the low-to-mid $90s, but falling below it would signal a deeper slide. A move above $102 would challenge the current bearish forecast.
Disclaimer: This content is for informational purposes and not financial advice.
