July 31, 2024 (Investorideas.com Newswire) Crude oil futures rebounded on Wednesday after hitting a seven-week low, driven by heightened tensions in the Middle East. This adds to recent regional uncertainties around the region's development as concerns around the latest attacks raise fears of further instability. As a result, traders could focus on any sign of escalating tensions while fears of a larger-scale war remain.
Despite the geopolitical concerns, oil prices could remain pressured by weak demand in China, the world's largest crude oil importer. China's slowing economic growth continues to affect market sentiment. There are growing expectations that Beijing might need to introduce more economic stimulus, leaving oil markets cautious in this regard.
However, US crude oil inventories dropped by 4.495 million barrels for the week ending July 26, exceeding the expected 2.333-million-barrel decline and marking the fifth consecutive week of decreases. The trend could support oil prices to a certain extent as demand in the US could be stronger.
On the supply side, OPEC+ could start phasing out its production cuts as planned which could weigh on the market if demand does not pick up. As a result, traders could monitor any change in decision from the organisation.
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