Oil futures: Crude prices rebound on geopolitical tensions
Quantum Commodity Intelligence – Crude oil futures Tuesday continued to pull away from the 2024 lows posted at the start of the week, but only after after another volatile session.
Front-month Oct24 ICE Brent futures were trading at $76.79/b (1625 MT), compared to Monday's settle of $76.30/b, having slumped to just above $75/b in the previous session.
At the same time Sep24 NYMEX WTI was trading at $73.54/b versus Monday's settle of $72.94/b.
Prices came under heavy downwards pressure at the start of the week as part of the broader financial selloff, which also saw a sharp reversal in equities markets.
Equities and financial markets, including commodities, remained choppy after Monday's rout although were showing signs of steadying later in the session.
But markets initially bounced from lows earlier Tuesday on rising geopolitical tensions in the Middle East, while the closure of Libya's Sharaha field also lent support.
Investors have been braced for a strike by Iran against Israel after last week's killing of a senior Hamas figure, with the intensity of any retaliatory attack seen as key for the region.
Trigger
The selloff has been triggered by a run of soft economic data, including China falling short on growth targets, while latest US data revealed rising unemployment and the manufacturing sector contracted for a fourth consecutive month in July.
"Already before we had the jobs report, already before the manufacturing data, we were concerned about weaker imports into China, weaker refinery utilization rates in China," Helima Croft, head of global commodity strategy at RBC Capital Markets, told on CNBC.
Meanwhile, OPEC producers added 100,000 bpd in June, while Iraq still produced around 160,000 over its 4 million bpd ceiling, which doesn't take into account additional compensation cuts.
The group pumped 26.7 million bpd, according to a Reuters survey.
Spot prices in the North Sea were also under pressure in the early part of the week as flagship Forties traded in Monday's MOC window at +$1.15/b to the underlying Dated Brent swap on a CIF Rotterdam basis, the equivalent of around $0.15/b FOB.
