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Crude Oil News Today: Saudi Arabia Aims to Boost Exports to China

By:
James Hyerczyk
Published: Jul 9, 2024, 09:41 GMT+00:00

Key Points:

  • Major U.S. Gulf Coast refineries report limited disruption from Hurricane Beryl, with key oil-shipping ports resuming operations and refiners restarting units.
  • Saudi Arabian crude oil exports to China expected to rise in August, potentially reaching 44 million barrels and helping regain market share.
  • Oil prices settled down 1% on Monday amid hopes for a Gaza ceasefire deal, potentially reducing global crude supply disruption concerns.
  • Market participants await U.S. inflation data and Fed Chair Powell's congressional appearances, with recent soft labor data increasing rate cut expectations.
Crude Oil News Today

In this article:

Oil Prices Edge Lower Despite Minimal Hurricane Impact

Oil prices are lower on Tuesday even though Hurricane Beryl, which hit a key U.S. oil-producing hub in Texas, caused less damage than anticipated. This easing of supply disruption concerns failed to support prices.

At 09:20 GMT, Light Crude Oil Futures are trading $81.86, down $0.47 or -0.57%.

Minimal Impact on Gulf Coast Refineries

Despite some slowdowns in refining activity and evacuations at production sites, major refineries along the U.S. Gulf Coast reported minimal impact from Hurricane Beryl. The storm weakened into a tropical storm after making landfall in Texas. Key oil-shipping ports, including Corpus Christi and Houston, are resuming operations, with several refiners preparing to restart their units.

Middle East Developments Influence Market

Traders are closely monitoring the situation in the Middle East for additional market cues. Oil prices settled down 1% on Monday amid hopes of a possible ceasefire deal in Gaza, which could reduce concerns about global crude supply disruptions. However, significant gaps remain between the parties involved in negotiations.

Saudi Crude Exports to China Expected to Rebound

Saudi Arabian crude oil exports to China are projected to increase in August, potentially marking the first rise in four months. Traders anticipate shipments of at least 44 million barrels, up from approximately 36 million barrels in July. This increase could help Saudi Arabia regain market share in China, the world’s largest oil importer.

U.S. Economic Data and Fed Watch

Market participants await key U.S. inflation data and Federal Reserve Chair Powell’s appearances before Congress. Recent soft labor market data has increased expectations of an interest rate cut in September, with the probability now estimated at about 80%.

Short-Term Market Forecast

The oil market outlook appears bearish in the short term. The limited impact of Hurricane Beryl and potential progress in Middle East ceasefire talks are exerting downward pressure on prices. While the expected increase in Chinese demand for Saudi crude could provide some support, it has not been sufficient to offset the current bearish sentiment. Traders should closely monitor U.S. economic indicators and Fed statements for further direction, as these factors could influence broader market sentiment and oil demand expectations.

Technical Analysis

Daily Light Crude Oil Futures

Despite a three-session retreat, the overall trend for Light Crude Oil Futures remains bullish. The price is currently nearing retracement zone support at $80.83 to $79.16, while edging closer to the 50-day moving average at $78.91.

While short-term momentum is down, the longer-term uptrend is intact, with prices still well above the 200-day moving average at $77.60. Traders are likely to watch these levels for potential buying opportunities as the market consolidates.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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