WTI drops to $81.50, Saudi oil exports to China rebound

West Texas Intermediate (WTI) extended losses for the third session, trading around $81.50 per barrel in Asian markets on Tuesday.

Crude oil prices faced pressure after Hurricane Beryl, which struck a key US oil-producing hub in Texas, caused less damage than anticipated by markets. Despite slowdowns in refining activity and evacuations at production sites, major refineries along the Gulf Coast reported minimal impact from the hurricane.

This decline would be partly influenced by recent developments involving Saudi Arabia.

According to Reuters, Saudi crude oil exports to China are expected to rebound in August, with shipments reaching at least 44 million barrels, which will bolster demand.

Exports to China from Saudi Arabia are set to increase in August for the first time in four months, rising from approximately 36 mln barrels in July. This rebound is expected to assist the largest oil exporter in reclaiming its share in the largest import market.

Saudi exports to China had plummeted to 1.12 mln barrels per day in June, the lowest since March 2020, as Reuters quoted data from analytics firm Kpler.

Looking ahead, crude oil prices might encounter further challenges as market participants await progress in ceasefire negotiations in the Middle East.

A potential ceasefire agreement in Gaza could alleviate concerns about global crude supply disruptions.

However, according to the White House, significant differences remain between the parties involved, with Hamas expressing concerns over new Israeli actions in Gaza that could jeopardise the potential for an agreement.

(Source: OANDA)